I've been looking at two options, both of which have significant research behind them. I am just curious out of the two, where are people leaning towards (or is a 50/50 split weighting another good option?
1) Gross Margin (Marx): Ranking based on Gross Profits (TTM) / Total Assets (latest quarter)
2) Piotroski F Score: A score assigned from 0 to 9 based on a checklist of the following:
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Positive ROA
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Positive Operation Cash Flow
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Increase in ROA over previous year
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Cash Flow from Operations higher than Net Income
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Lower ratio of Long Term Debt relative to previous year
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Higher Current Ratio than previous year
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No new shares issued
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Higher Gross Margin than previous year
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Higher Asset Turnover Ratio than previous year
Appreciate any discussion on the merits of either. A small issue is that many screeners cover F score, but few cover Marx's ratio, requiring manual calculations (or very high premium to access a screener that covers this). It could also mean that this is less used which could mean the potential for surplus alpha.
Submitted July 31, 2017 at 08:46AM by Fearspect http://ift.tt/2vaPLAL
