Equities Research - an Overview

Covering the ASX 200, Lonsec’s proprietary Equity Research model differs from the traditional ‘Buy, Sell, Hold’ models, determining the relative risk ratings for each company within the universe and assigning an “Approved” (Investment Grade) or “Not Approved” rating.

Our research process focuses on the Income and Growth profiles for a company, utilising a comprehensive database of over 100,000 data points in the research process, which includes a wide range of historical and forecast financial data.

We follow a structured framework assessing ten key financial metrics for both Income and Growth to arrive at an overall Income risk rating and overall Growth risk rating for each company. Each company will fall into one of four classifications in our Income and Growth profiles.

 

Income Profile Growth Profile

 

There is also an Action Signal which represents Lonsec’s view on the perceived medium-term value of the underlying company. The signal bands are used to determine whether a company is currently under-valued or over-valued by comparing the current market price to the projected fair value of the business.

 

Action Signal

 

Interactive charts provide you with a visual snapshot of the some of the key financial parameters likely to impact the share price performance of the given company, covering four segments:

  • Growth
  • Income
  • Financial Strength
  • Valuation

 

Key Financial Metrics

 

Two-page Stock Viewpoint’s provide detailed information on the Income and Growth profiles, rating, business snapshot and quantitative charts. These are ideal for use in Statements of Advice and discussing a stock with a client.

For more information on the Equities Research Methodology, click here…

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