EVM states that the market performance of any stock is closely correlated to the underlying company’s expected operating performance. Every quarter we analyse the operating performance of the recommended stocks against the expectations calculated by EVM.
We rank the recommendations based on the operating performance and group them in 4 quadrants based on expectations achieved in that quarter. Here is how we group them:
QUADRANT CLASSIFICATION PER EXPECTATIONS ACHIEVED (%) EVERY QUARTER | ||||
---|---|---|---|---|
Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | |
Quadrant 1 | <=20 | <=40 | <=60 | <=80 |
Quadrant 2 | >20 & <22.5 | >40 & <45 | >60 & <67.5 | >80 & <90 |
Quadrant 3 | >22.5 & < 25 | >45 & < 50 | >67.5 & < 75 | >90 & < 100 |
Quadrant 4 | >25 | >50 | >75 | >100 |
According to EVM, the group meeting the expectations for that quarter should deliver better than market returns.