Consistent Expectations Book-to-Price Ratio
factor.formula
Consensus expected book-to-market ratio = Consensus expected net assets / current total market value
in:
- :
The weighted average net assets based on analyst forecasts are used to measure the market's expectations of the company's future profitability. This value can be calculated using different weighting methods, such as:
- Arithmetic mean (Wind): A simple arithmetic average of all analysts' forecasts.
- Time and institution double weighting (Chaoyang Yongshou): Weighted according to the time of the analyst's forecast and the authority of the institution.
- Forecast accuracy weighting (Orient Securities): Weighted according to the analyst's historical forecast accuracy, with analysts with higher accuracy having higher weights.
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The company's current total stock market value is calculated as: stock price * total share capital.
factor.explanation
The consensus expected book-to-market ratio can reflect the market's expected deviation of the company's value by comparing the consensus expected net assets with the current market value. The higher the ratio, the more likely the company's value is to be underestimated, and vice versa. Investors can use this factor to screen stocks with investment value. It should be noted that the calculation methods of the consensus expected net assets of different institutions may differ, so when using it, you should pay attention to its source and specific calculation method. In addition, the consensus expectation is a reflection of market consensus and may have certain deviations, so this factor should be used in combination with other factors.