Automated Earnings Power Stock Analysis With Screener.in data

The freefincal automated stock analyzer (screener.in edition) now has now auto-generates Hewitt Heiserman Jr.’s Earnings Power Box, thanks to efforts of R. Srivatsan, who explained how to identify good business from bad one using it: It’s Earnings That Count: Forget the next Infy; Can you identify the next Satyam? I had previously published a version that uses morningstar financials.

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If you have not read Srivatsan’s post, please do so before reading any further. In order to ensure the calculation is based on data from a single source, Srivatsan has made some reasonable modifications to the formulae mentioned in his post. Although the earnings power box can be generated with data from morningstar in under 20 seconds, the tool is only meant for users who spend a lot longer in studying and interpreting the data.

Like any stock analysis, this tool comes with assumptions and it is important to understand them and change them as per sector or company.

Earnings Power Box

This is a plot of two the Defensive EPS (earnings per share) vs Enterprising EPS

The idea is to spot where a company falls in.

Earnings Power Box

This is based on: Earnings Power Valuation ModelOpens in a new window (doc file).

Srivatsan has defined enterprising and defensive EPS as follows:

Enterprising EPS = (Enterprising Income)/(Shares Outstanding)

Defensive EPS =  (Defensive Income)/(Shares Outstanding)

Enterprising Income = Net Income – (15% x total capital)

15% here is the weighted average cost of capital (WACC) and is an expected return. You can modify this for each FY and for each stock.

15% x total capital = enterprising interest.

Defensive Income = cash flow from operating activity -capital expenditure

Srivatsan will explain more about these assumptions and limitations (everything has them)  in a follow-up post.

Earnings Power Box Gallery

Please remember that this tool is not for those who do not understand what the above definitions stand for. Do not take the graphs at face value. Context matter and always evaluate a stock in multiple ways.

Features of the stock analysis spreadsheet

The spreadsheet

  • pulls financials from screener.in excel files (to be downloaded by the user)
  • pulls adjusted stock price history from money control, and
  • calculates intrinsic value six different ways!

Previous editions which pulled financials from morningstar and  annual (standalone/consolidated) and quarterly financials from Value Research online are also available (use links below).

Valuation models available:

1) Price Multiple Model

2) Sustainable Growth Rate

3) Book Value Growth Rate (Buffett’s approach to valuation)

4) Discounted Cash Flow  (DCF): Not yet available as free cash flow data is missing in screener.in

5) Reverse DCF Valuation : Not yet available, same reason above.

6) Graham formula  and Graham number

7) Piotroski Score for the last 9 financial years

8) Earnings Growth Estimate.

9) Automated Return on Equity Analysis with the Dupont Formula

stock-analysis-spreadsheet
The “read me first” sheet

Instructions

  1. Get an account from screener.in
  2. Choose a stock and download the balance sheet data using the “export to excel” option on the top right of the stock page.
  3. Open both the analysis spreadsheet and the screener file.
  4. Go to the screener-inputs page and follow  the instructions (run a couple of macros).
Instructions for using screener
Instructions for using screener

CAUTION: Screener has the ability to upload custom modified templates so that the next time you download the balance sheet data of another stock, the formulae would be intact.

DO NOT TRY TO UPLOAD THIS SPREADSHEET BACK INTO SCREENER

This has macros and hopefully, their server will reject it seeing the file extension.

I shall release a macro-free template which can be uploaded in a day or two. This will not have any macros and stock price history from moneycontrol will not be available.

Screenshots of the stock analysis spreadsheet

stock-analysis-spreadsheet-3
The screener data sheet. The quarterly data will be removed by the analyser.
stock-analysis-spreadsheet-4
The analysis sheet where screener data is processed. This is quite disordered. Will set this right in future versions.
stock-analysis-spreadsheet-5
Balance sheet metrics can be graphically analyzed here
stock-analysis-spreadsheet-6
The moneycontrol page for downloading stock price history.
stock-analysis-spreadsheet-7
Historical stock price data

Altman Z-score analysis of the financial health of a business

stock-analysis-spreadsheet-8

Automated Return on Equity Analysis with the Dupont Formula
stock-analysis-spreadsheet-9Automated Stock Analysis with the Piotroski Score
stock-analysis-spreadsheet-10Stock Analyzer with Graham Formula and Graham Number
stock-analysis-spreadsheet-11Valuation with price multiple model
stock-analysis-spreadsheet-12

Valuation using sustainable growth ratestock-analysis-spreadsheet-13Valuation using Book Value Growth Rate (Buffett’s method)
stock-analysis-spreadsheet-14

Please share this sheet among stock investors so that it can be made better.

Download Link

Download the May 2017 freefincal stock analyser scr edition This is a windows file.

Mac Version:  Automated Stock analyser with screener.in data (this does not have the earnings power box feature. Will update if there is a demand)

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6 thoughts on “Automated Earnings Power Stock Analysis With Screener.in data

  1. Hi There. Thanks for the this. But wanted to draw your attention towards the earlier release (modified-freefincal-stock-analyzer-Ver-13-morningstar-Earnings-power-Box-1) & this one (freefincal-stock-analyzer-May-2017-scr-edition-earnings-power-box-1). While testing it, for EID Parry India/ Dewan Housing & few others, the Graham Number of both sheets diverged very much. eg: for EID Parry: Graham number for this version (modified-freefincal-stock-analyzer-Ver-13-morningstar-Earnings-power-Box-1) shows 339.68 & for new version (freefincal-stock-analyzer-May-2017-scr-edition-earnings-power-box-1), 10.44. This inconsistency is across stocks. Will really appreciate if this can be explained, as underlying data whether from morning star or Screener.in ought to be the same, since they based on AR of companies filing.

    1. Thank you for pointing this out. This could be due because in the earlier versions the moneycontrol price was used with screener data. I have corrected it in this version.

  2. The new version of (freefincal-stock-analyzer-May-2017-scr-edition-earnings-power-box-1), the Graham Number continues to show 10.44, which seems very off from what it should have been. Am I doing some thing wrong in that case?

    1. Can you please download the latest financials in both the old and new versions and check? Then it would be easier to spot the discrepancy.

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