SGRP

Capital-structure-agnostic earnings yield. Pairs with Greenblatt ROC to compute the famous Magic Formula rank (the universe-rank of earnings yield plus universe-rank of return on capital). Pre-tax operating earnings divided by the full claim on the firm gives a cleaner cross-firm valuation comparison than P/E or earnings yield alone, because it strips out the distortions from leverage, cash, and tax structure.

An ABSOLUTE intrinsic-value signal, distinct from the relative multiples (PE, EV/EBITDA) which only compare a stock to its industry peers. Intrinsic value comes from the Residual Income Model: book value plus the present value of the residual income (earnings above a charge for the cost of equity) the firm is forecast to generate. This is the best-VALIDATED absolute value signal in the academic literature (Frankel & Lee 1998, replicated through 2026): the value-to-price ratio robustly predicts 1-3 year cross-sectional returns, survives every major factor model, and subsumes book-to-market. Because it is scored across the WHOLE universe (not within-industry), it complements the relative multiples rather than double-counting them. Pair it with a quality screen (Piotroski) to avoid value traps, and read the EPV decomposition to see whether a discount is unpriced earnings power or just speculative growth coming out of the price. One caveat: the model anchors on book equity, so for low-book, buyback-heavy, or asset-light firms (think Apple or Coca-Cola) book is a poor floor and the model can read durable franchises as wildly overvalued. Readings are clamped, and the metric is currently shadow-scored — shown for context, with zero weight in the fundamentals grade — pending validation.

Share price divided by per-share book value of common equity — what the market values the franchise at versus what the accountants say it's worth on paper. Most informative for asset-heavy businesses (banks, insurers, industrials) where book value approximates a liquidation floor; far less informative for asset-light franchises whose value sits in brand, software, or other intangibles that GAAP under-states or excludes entirely.

Easier to compare than operating margin across firms with very different leverage and depreciation profiles, because it adds D&A back. Software platforms commonly run above 30%; capital-light service businesses cluster around 20%; capital-intensive industrials sit below 15%. The weakness: ignores the cash needed to maintain the asset base — pair with FCF margin for a complete profitability picture.

End-to-end conversion ratio: of every dollar of revenue, how much falls through to genuine free cash flow available to all capital providers? More honest than net margin because it accounts for the capex needed to maintain (and grow) the business. The single best indicator of whether the business is a quality compounder or a GAAP-earnings illusion.

Free cash flow the business throws off, divided by what the market currently charges for the equity. Treats the equity claim as a perpetual stream of free cash. More honest than earnings yield because it reflects the cash actually available to shareholders after all reinvestment. Cyclicals can swing below zero in a downturn — read with the trailing-cycle range.

First-line profitability measure — how much revenue is left after the direct cost of producing it. Stable or rising gross margin signals pricing power and low input-cost exposure; falling gross margin is one of the earliest reliable signals of competitive pressure or commodity-input squeeze. Industry context is everything: 30% gross margin is excellent for a grocery chain and disastrous for a software company.

Operating margin minus interest, tax, and below-the-line items. Useful but noisier than operating margin: tax rate changes, debt-service shifts, and one-time items can move net margin year-over-year even when the operating business is unchanged. Always pair with operating margin and FCF margin — divergence between them is a tell about leverage, tax structure, or earnings quality.

Captures the leverage between revenue and operating profit — the core test of whether a business converts sales into income at the operating level. Independent of capital structure (excludes interest) and tax-jurisdiction noise. Trend matters as much as level: an improving operating margin indicates pricing power or operational efficiency gains; a falling margin signals input-cost pressure, wage inflation, or competitive erosion.

Capital-efficiency measure that ignores how the assets are financed. Useful for comparing within a sector but heavily biased by industry — banks and utilities run low ROA by design (huge balance sheets), software and franchise businesses run high ROA (asset-light). The DuPont decomposition links it to ROE: ROE = ROA × (assets / equity), so leverage inflates the gap between ROA and ROE.

Pre-tax cousin of ROIC using operating capital employed (long-term debt plus equity, approximately equal to total assets minus current liabilities). Damodaran publishes ROCE by industry annually, so it benchmarks cleanly against sector norms. Particularly useful for capital-intensive businesses where you want to see pre-tax returns on the long-term capital base.

The headline profitability metric. Net income divided by average book equity tells you how productive each dollar of shareholders' capital is. High sustained ROE compounds book value when the business can reinvest at a similar return. Two warnings: ROE rises mechanically with leverage (high D/E inflates ROE without making the business better), and aggressive buybacks can shrink the equity denominator faster than they shrink earnings, artificially boosting ROE even as fundamental returns are flat.

Bottom-line growth on a per-share basis — captures both operating progress and any net buyback effect. The denominator uses the absolute value of prior EPS so a turnaround from negative to positive earnings reads with the conventional sign rather than producing arithmetic nonsense. Pair with revenue growth to separate real franchise expansion from buyback-driven per-share lift.

CCI measures how far the current typical price ((H+L+C)/3) sits from its rolling SMA, normalized by the mean absolute deviation. Originally built for commodity cycles by Donald Lambert; widely used as a generic momentum / overbought-oversold gauge on any asset. CCI is unbounded but ±100 is the conventional 'normal range' edge — readings beyond that are interpreted as strong directional thrusts or stretched extremes depending on context.

+1 while CCI is below -100 (oversold); -1 while CCI is above +100 (overbought); 0 inside the ±100 band.

+1 = oversold (stretched below the typical-price mean, mean-reversion buy bias), -1 = overbought (stretched above), 0 = inside the ±100 band.

Designed to buy oversold pullbacks within an established uptrend (price above the regime moving average). Uses a 2-period RSI rather than the standard 14 to make it hyper-responsive to short-term swings. The default exit_method is RSI-threshold based: hold while RSI(2) is below the configured exit threshold and exit when RSI(2) crosses above exit. The book-style SMA exit is also supported by setting exit_method=sma with exit_ma.

+1 when price is above regime_ma and RSI(2) drops below oversold; held while inside the trade; back to 0 when the configured exit_method fires.

+1 = pullback-buy state active, -1 = pullback-short state active (symmetric rule in a down regime), 0 = flat.

Compares price pivots against the MACD histogram (MACD line minus signal line) at those same bars. Bullish divergence: price makes a lower low, histogram makes a higher low — momentum is improving beneath the surface. Bearish divergence: price makes a higher high, histogram makes a lower high. Slower than the MACD signal cross but a richer confirmatory tell — the histogram captures momentum acceleration, not just direction.

+1 at the right-hand pivot of bullish divergence; -1 at right-hand pivot of bearish divergence; 0 otherwise.

+1 = bullish divergence, -1 = bearish divergence.

MFI is essentially RSI computed on (typical price × volume) instead of close alone, so high-volume bars push the oscillator harder than low-volume bars. It's 0-100 bounded and uses the same 20/80 OB-OS convention as a slower RSI. Because it folds in volume, MFI can flag distribution / accumulation underneath a flat price tape that RSI would miss.

+1 while MFI is below 20 (oversold); -1 while MFI is above 80 (overbought); 0 in between.

+1 = oversold (bullish, volume-weighted), -1 = overbought (bearish), 0 = mid-range.

The 14-period Relative Strength Index is the canonical Wilder momentum oscillator, bounded 0-100. Readings below 30 mark oversold conditions and above 70 mark overbought. This signal flags time spent at those extremes: bullish while RSI is at or below 30 (a mean-reversion bounce bias), bearish while it is at or above 70. The 30/70 thresholds are standard practice layered on top of the TA-Lib primitive.

+1 while RSI(14) is at or below the oversold threshold (default 30); -1 while it is at or above the overbought threshold (default 70); 0 in between.

+1 = oversold (bullish mean-reversion bias), -1 = overbought (bearish), 0 = RSI in its mid-range.

Bullish when %K crosses above %D while both lines are below the oversold threshold (typically 20); bearish when %K crosses below %D while both are above overbought (typically 80). Filters out mid-range stochastic crosses, which whipsaw in chop. Best used at well-defined ranges and at trend extremes.

+1 on bullish cross in oversold; -1 on bearish cross in overbought; 0 otherwise.

+1 = oversold bullish cross, -1 = overbought bearish cross.