Good news and bad news from VectorVest
Bad news first: AYSI has a sell recommendation today, because it dropped below VV's stop price for it ($2.58). If it closes above that, it should get a hold again.
Good news: They had listed AYSI as having a P/E of 999.99 (their default, apparently, for a company with no earnings). That lead to their formula giving AYSI an intrinsic value of about 50 cents. I pointed out to them that AYSI's ttm P/E was about 32x. They then updated the system to show that. They also showed a forward earnings estimate of .08. I e-mailed them again, noting that the company earned more than that just last quarter.
Checking the analysis as of tonight, they have updated their forward earnings estimate to .14 (still too low, I think we all agree) and updated the P/E to 18x (a forward P/E, I guess) and updated AYSI's intrinsic value to $3.55.
It looks like VectorVest's system is still digesting AYSI. I suspect that if we see record earnings in the next 10Q, VectorVest's analysis of AYSI will be updated to a buy. We'll see. Below is from the current analysis report.
Value: Value is a measure of a stock's current worth. AYSI has a current Value of $3.55 per share. Therefore, it is undervalued compared to its Price of $2.52 per share. Value is computed from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates. Value increases when earnings, earnings growth rate and profitability increase, and when interest and inflation rates decrease. VectorVest advocates the purchase of undervalued stocks. At some point in time, a stock's Price and Value always will converge.
RV (Relative Value): RV is an indicator of long-term price appreciation potential. AYSI has an RV of 1.13, which is good on a scale of 0.00 to 2.00. This indicator is far superior to a simple comparison of Price and Value because it is computed from an analysis of projected price appreciation three years out, AAA Corporate Bond Rates, and risk. RV solves the riddle of whether it is preferable to buy High growth, High P/E stocks, or Low growth, Low P/E stocks. VectorVest favors the purchase of stocks with RV ratings above 1.00.
RS (Relative Safety): RS is an indicator of risk. AYSI has an RS rating of 0.43, which is very poor on a scale of 0.00 to 2.00. RS is computed from an analysis of the consistency and predictability of a company's financial performance, debt to equity ratio, sales volume, business longevity, price volatility and other factors. A stock with an RS rating greater than 1.00 is safer and more predictable than the average stock in the VectorVest database. VectorVest favors the purchase of stocks of companies with consistent, predictable financial performance.
RT (Relative Timing): RT is a fast, smart, accurate indicator of a stock's price trend. AYSI has a Relative Timing rating of 0.95, which is fair on a scale of 0.00 to 2.00. RT is computed from an analysis of the direction, magnitude, and dynamics of a stock's price movements over one day, one week, one quarter and one year time periods. Once a stock's price has established a strong trend, it is expected to continue in that trend for the short-term. If a trend dissipates, RT will gravitate toward 1.00. RT will explode from bottoms, dive from tops, and reflect changes in price momentum. VectorVest favors the purchase of stocks with RT ratings above 1.00.
VST (VST-Vector): VST is the master indicator for ranking every stock in the VectorVest database. AYSI has a VST rating of 0.88, which is fair on a scale of 0.00 to 2.00. VST is computed from the square root of a weighted sum of the squares of RV, RS, and RT. Stocks with the highest VST ratings have the best combinations of Value, Safety and Timing. These are the stocks to own for above average, long-term capital appreciation. VectorVest advocates the purchase of safe, undervalued stocks rising in price.
Recommendation (REC): VectorVest gives a Buy, Sell, Hold recommendation on every stock, every day. AYSI has a Sell recommendation. REC reflects the cumulative effect of all the VectorVest parameters working together. These parameters are designed to help investors buy safe, undervalued stocks rising in price. They also help investors avoid or sell risky, overvalued stocks falling in price. VectorVest recommends that investors buy high VST-Vector, Buy-rated stocks in rising markets.
Stop (Stop-Price): Stop is an indicator of when to sell a long position or cover a short position. AYSI has a Stop of $2.58 per share. This is $0.06 above AYSI's current closing Price. A stock's Stop is computed from a 13 week moving average of its closing prices, and is fine-tuned according to the stock's fundamentals. High RV, high RS stocks have lower Stops, and low RV, low RS stocks have higher Stops. In the VectorVest system, a stock gets a 'B' or 'H' recommendation if its Price is above its Stop and an 'S' recommendation if its Price is below its Stop.
GRT (Earnings Growth Rate): GRT reflects a company's one to three year forecasted earnings growth rate in percent per year. AYSI has a forecasted Earnings Growth Rate of 14.00%, which VectorVest considers to be good. GRT is computed from historical, current and forecasted earnings data. It is updated each week for every stock in the VectorVest database. GRT often foretells a stock's future price trend. If a stock's GRT trend is upward, the stock's price will likely rise. If GRT is trending downward, the stock's Price will probably fall. VectorVest favors the purchase of stocks whose GRT is rising and is greater than the sum of current inflation and interest rates, as shown weekly in our investment climate report.
EPS (Earnings per Share): EPS stands for leading 12 months Earnings Per Share. AYSI has a forecasted EPS of $0.14 per share. VectorVest determines this forecast from a combination of recent earnings performance and traditional fiscal and/or calendar year earnings forecasts.
P/E (Price to Earnings Ratio): P/E is a popular measure of stock valuation which shows the dollars required to buy one dollar of earnings. AYSI has a P/E of 18.00. This ratio may be deemed to be high or low depending upon your frame of reference. The average P/E of all the stocks in the VectorVest database is 66.62. P/E is computed daily using the formula: P/E = Price/EPS.
