Fundamental Scoring

I was quite thankful to my close friend, James who is currently working at an investment management firm. Today, he has provided the latest list of securities listed on Bursa Malaysia with relevant key parameters (extracted from Bloomberg) – P/E, P/B, Average 3Y ROE, ROIC, Gearing, Dividend Yield and Operating Margin. Hence, with this data, I decide to rank 932 listed securities via a simple fundamental scoring system.

Steps involved (strictly for illustrative purposes)
– Compute the median of the key parameters of the entire basket of securities

– Assign “1” or “0” if the security’s parameter is relatively “better” than the median of the population. For example, if the P/E of the security is lower than median P/E of the population, a “1” will be assigned to the security in terms of P/E

– Add up the scoring and rank it based on total scoring – the higher the number, the better

The following is the list of highest ranked securities:

Top Rating.png

The following is the list of lowest ranked securities:

Bottom Rating

Does this scoring mean anything? Without further backtesting and empirical research, it does NOT mean that securities with higher scoring will outperform securities with lower scoring.  What is important to note is that this fundamental scoring approach may provide some possible investing ideas that warrant further detailed security analysis.

DISCLAIMER: THIS IS A PERSONAL BLOG AND SHALL NOT BE RELIED IN WHATSOEVER MANNER BY ANYONE. ALL ARTICLES CONTAINED IN THIS SITE ARE STRICTLY FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY, COMPLETENESS AND TIMELINESS. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES MENTIONED IN THE ARTICLES.

Author: Ken Utau

Markets Observer + Food Lover

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