ACE'S GLOSSARY OF SELECTED TERMS
ACE'S Stock Grade (ASG) - a proprietary stock grading system devised by ACE'S Stock Research ("ACE'S") to encapsulate in one number the investment qualities of a stock. Generally, the higher the ASG value, the better expected performance of the rated stock. Significance of ASG values: 60.00 plus ASG (Excellent); 50.00 - 59.99 ASG (Very Good); 40.00 - 49.99 ASG ( Good); 30.00 - 39.99 ASG (Average); 20.00 - 29.99 ASG ( Poor); Less than 20.00 ASG (Very Poor).
ADR (American Depository Receipt) - enables an investor to buy shares in a foreign company that is traded in a U.S. exchange. It is a negotiable certificate issued by a U.S. bank which represents a specified number of shares (or one share) in a foreign stock. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas. ADRs help to reduce administration and duty costs that would otherwise be levied on each transaction. ADRs have currency and economic risks for the underlying shares in another country.
Alpha stock, ACE'S - a stock that is classified as among the best of ACE'S picks based on the following criteria; high ASGs, demonstrated long-term price stability, demonstrated long-term price growth, companies that are at least 3-5 years old, and companies that are in industries with strong price performance.
Cash Flow - is basically the amount of cash a company generates in the course of running its business during a specific period. It is defined as revenues less all operating expenses, but calculated through a series of adjustments to net income. Cash flow is crucial to the operation and survival of companies. A company having ample ready cash ensures that creditors, employees, and others can be paid on time.
Cash Flow, Free - Operating cash flow less deductions for capital expenditures and dividends. Free cash flow is the amount of cash that a company has left over after it has paid all of its expenses, including investments. Negative free cash flow is not necessarily an indication that a company is not doing well. Note that some young companies apply their cash into investments, which diminishes their free cash flow. Free cash flow is considered by some experts to be a better indicator, than earnings, of a company's financial health.
Debt/EquityRatio - is calculated by dividing a company's long-term debt by its shareholders equity (i.e., the amount of funds contributed by stockholders plus the retained earnings or losses). A higher debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This higher ratio can result in volatile or negative earnings as a result of the additional interest expense. Thus, the Debt/Equity Ratio is popularly used as a measure of a company's financial health.
EMA - Exponential Moving Average. A type of moving average that gives more weight to the latest data. A 13-day EMA is the average, for example, of a stock's 13 consecutive days closing prices. A 50-day EMA is the average, for example, of a stock's 50 consecutive days closing prices. An EMA gives an indication on how much a stock's current price is over or under a particular referential EMA. Thus, an EMA could be used as the basis for determining the short term statistically-based buy points for a particular stock.
Equity - Another name for a stock. When used in relations to a balance sheet, it pertains to the amount of funds contributed by the owners (the stockholders) plus the retained earnings (or losses). In general, equity can be thought of as ownership in any asset after all debts associated with that asset are paid off.
Exceptional stock - a stock(s) that had gained 1,000% or more in ten (10) years. Examples of these category of stocks are shown in the article "Google's IPO 10 Years Later" (published 8/19/2014 by the Wall Street Journal) which listed the top 15 stock performers in the past decade (2004-2014). Twelve (12) of the fifteen (15) stocks named in the article were also picked by ACE'S.
Gross Margin - is a variant of profit margin. It is defined as Gross Income divided by Net Sales.
Growth Stock - stocks of companies that are expected to have increased earnings at a rate higher than These stocks are often priced above or at fair value.
Historical Stock Price(s) - a tabulation of the daily prices of a particular stock for a defined past period of time. ACE'S historical stock price data (daily open, close, high, low and adjusted closing prices; and volume) are sourced from Yahoo! Finance's "Historical Prices" page.
Industry Group - is used to describe a basic category of business activity in the stock market. For example, the semiconductors, consumer durables, biotechnology, telecom services, etc. industries.
Investment - in general terms, investment means the use money to purchase a product or other item of value with the expectation of making more money.
Market Capitalization (Market Cap) - is calculated by multiplying the number of its outstanding shares by the shares' current market price. Market cap measures a company's size. The market cap also provides a broad gauge of the growth-versus-risk potential of a company. Historically, large caps have experienced slower growth with lower risk; whereas small caps have experienced higher growth potential, but with higher risk.
There are presently six classes of Market Cap: Mega Cap, Big/Large Cap, Mid Cap, Small Cap, Micro Cap and Nano Cap. Their exact definitions presently varies. The following generally defines the cap of a company;
Mega Cap: Market cap of $200 billion and greater
Big/Large Cap: Market cap of $10-$200 billion
Mid Cap: Market cap of $2 billion to $10 billion
Small Cap: Market cap of $300 million to $2 billion
Micro Cap: Market cap of $50 million to $300 million
Nano Cap: Under $50 million
ACE'S STOCK RESEARCH