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Stock Selection Models

All All our products are designed to assist your investment decision making process. 

Dividend Discount Model

SEENSCO establishes payout ratios and 10 year earnings projections for each company covered. The future value of the company is determined by integrating short-term market consensus earnings estimates with longer term nominal incremental changes and deriving an optimal P/E ratio to the expected earnings at year 10. The future value and dividend stream are then discounted by the effective bond yield on the companies debt, adjusted for an equity risk premium, to arrive at the current intrinsic value. Learn More

Operating Cash Flow Model

Pricing a company’s stock using the SEENSCO Operating Cash-Flow Model involves first estimating 10 year forward sales and earnings per share and then applying an operating cash-flow-to-earnings multiple to projected earnings to determine the future cash-flow stream. A valuation for the company is determined by assigning an equilibrium P/OCF ratio to a 10 year average cash flow projection. Adjusting this fair value by the normal trading range of the company’s stock gives the stock’s fair value range. A compound annual growth rate is then computed, assuming a 5 year holding period. Generally, stocks whose compound annual returns exceed the projected long-term annual rate of return on the market will qualify for investment while stocks whose returns are lower will qualify for sale. Learn More

Earnings Calibration Model

Introduced publicly in 2013, SEENSCO’s Earnings Calibration Model measures the acceleration or deceleration in the growth of earnings per share based on the latest 6 quarters as well as the previous 3-year, 5-year, 10-year, 15-year and 20-year periods. Rather than actual quarterly earnings figures, 12-month trailing earning are used to eliminate seasonal fluctuations. Trend-lines are estimated based on the six EPS series and extrapolated forward 2 years, and a weighted moving average growth rate is calculated (the “Rate of Calibration”) to characterize the curvature (acceleration or deceleration) of the company’s EPS series and is used to estimate the company’s price pattern moving forward. Learn More

Benjamin Graham Model

Introduced in 2014, this valuation model is a method of determining buying and selling points in a company’s stock through the determination of a central value as well as an upper and lower valuation range based on historical interest rate and fundamental data. Graham estimated the central value, or fair value, of a stock by capitalizing the average earnings per share over the previous “α” years by an “equilibrium” multiplier equal to 1 divided by k-times the yield on AAA-rated corporate bonds. Graham then established lower and upper price bounds equal to 80% and 120% of the central value estimate respectively. In Graham’s original model α=10 and k=2. That is, he capitalized a firm’s 10 year average earnings at 1 divided by twice the AAA-rated corporate bond yield. While this approach is intuitively sound, based on our experience it does not always yield the most satisfactory results. To determine the values of “α” of “k” for our model results, we rely on an optimization procedure that varies the parameter value “k” one-by-one for each of the current year, 3-year, 5-year and 10-year moving average EPS series until “k” converges on a “best fitting” series. In addition, for our model results, we do not simply rely on the average AAA-rated corporate bond yield in the broad market, we rely on the effective bond yield of the company’s own debt issues. Learn More

52-Week Low Model

Coming Soon!