mean reversion Archives

Tag Archives for " mean reversion "

ITV – a mean reversion

When in doubt, it seems we all try and cling on to our normalcy bias. While ITV (itv_l) might seem an odd example of markets use of a ‘mean reversion’ to provide a valuation anchor point, this very much depends on the metric used and the perspective sought. Use a fixed metric such as a […]

What’s wrong with Facebook?

Markets don’t seem to like Facebook. Those with access to the mean reversion analysis in the GrowthRater WebApp will be aware of the systematic relationship between organic revenue growth for these super-normal ‘growthers’ and how far out markets are reaching out to revert the growth rating and OpFCF yield back a market average. While also […]

Gartner Inc follow-up as US jobs data confirms softening trend for Info segment

Last month I flagged a warning on Gartner Inc. Consensus forecasts for a sustained rate of revenue growth over the next two years are clearly wrong. The question is whether they are too high or too low. In the blog piece on the subject I highlighted the correlation of the group’s organic revenue record to […]

Amazon through the growth prism

Amazon growthrater mean reversion Horizon analysis chart 23 July 2015

Markets often distinguish growth from value, but for an equity, growth defines value. For most stocks, this can be seen by the close relationship between the organic revenue growth being delivered by a company and the implied growth rating being discounted by the share’s operating FCF yield. A problem however arises when trying to price […]