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Accountable Finance's Combined Growth & Value Strategy

The Top 5 Growth Metrics in 1 Strategy Read more.

CAGR
Compound Annual Growth Rate
-
Beta
Volatility Compared to S&P 500
-
Total Return
1-Year Avg.
-
3-Year Avg.
-
10-Year Avg.
-
Investment amount
$10,000
Investment range
15 years
 
Total return
undefined%
Investment worth
$0
Strategy Formulas & Filters

Gross Profit CAGR (5-Yr)
  • Calculates the five-year compound annual growth rate of gross profit to measure long-term revenue expansion.
  • Weight = 25%
EBITDA CAGR (5-Yr)
  • Measures the five-year compound annual growth rate of EBITDA to capture long-term trends in operational profitability.
  • Weight = 12.5%
Free-Cash-Flow CAGR (5-Yr)
  • Computes the five-year compound annual growth rate of free cash flow to reflect long-term cash generation efficiency.
  • Weight = 25%
Return on Equity CAGR (5-Yr)
  • Derives the compound annual growth rate of ROE over five years to assess trends in profitability.
  • Weight = 12.5%
1 / Price to Sales Ratio (TTM)
  • Calculates the inverse of the Price to Sales ratio to emphasize companies with strong revenue relative to their market cap.
  • Weight = 25%
Trading Model

Purchase Model
  • Purchase 3 stocks every 3 months until portfolio size reaches 24.
  • Rebalance target: 30%.
  • Reinvest proceeds from sales every 3 months.

Selling Model
  • Hold the stock for a maximum of 2 years.
  • Sell Condition: EPS Growth 3-yr < 5-yr
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Strategy Information

The Combined Growth and Value Strategy: Revenue, Profit, Free Cash Flow & Returns combines the top five growth and value investing metrics. It combines four key compound annual growth metrics, CAGR 5-yr gross-profit growth, CAGR 5-yr net-profit growth, CAGR 5-yr FCF-Growth, and CAGR 5-yr ROE, to compute companies that are growing revenue, profits, free cash flow, and returns on equity, while at the same time their stock price is relatively low compared to earnings, determined by the fifth metric, the Difference in Fair Value calculation.

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