Methodology / Fundamentals

Fundamentals: what the last filing reported

Fundamentals reads a small set of reported financial metrics and places each on a common scale. Every input is a figure the company has already published in a filing — nothing here is estimated, projected or modelled.

One of the six factors in the Tapeline composite. One of three mid-weighted factors, alongside Smart Money and Macro. Tapeline publishes the ordering of the factor weights, not the numeric weights or the scoring equation.

What it measures

Observable quantities, nothing else

• ·Profit margin, as reported.
• ·Return on equity, as reported.
• ·Earnings-per-share growth between reported periods.
• ·Revenue growth between reported periods.
• ·An earnings multiple, where a lower multiple moves the reading up and a higher one moves it down.

How the reading is derived

The same procedure on every ticker

1. 01Each metric that is available is mapped onto a common 0–100 scale using fixed, broadly-drawn bands.
2. 02The available components are averaged. A metric that is missing is left out entirely rather than filled in with a guess, and the ticker's confidence percentage falls to reflect the thinner evidence.
3. 03If none of the metrics are available — as with most ETFs and funds — the factor is unavailable for that ticker and the composite substitutes a mid-range value.

Tapeline deliberately does not publish the numeric weights, the scoring equation, or the exact band edges used to map a measurement onto the 0–100 scale. What is published is the factor set, the weight ordering, each factor’s contribution on every ticker, and the record of every daily top-10.

What feeds it

Data behind this factor

Every category, its refresh cadence and where it appears in the product is listed on data sources.

Known limitations

Where this factor is weak

Every one of these is a property of the method, not a bug waiting to be fixed. They are listed here so a reader can decide how much weight to give the reading.

• —It is not sector-relative. Margin and return-on-equity levels that are ordinary in one industry are unusual in another, and this factor does not adjust for that.
• —ETFs, funds, trusts and many ADRs have no comparable company financials. The factor is simply unavailable for them.
• —The reading is exactly as current as the last filing. Between reports it does not move, even when the business does — for most companies that means it is static for weeks at a time.
• —A reported figure describes a period that has already closed. It describes the last reported quarter, not the current one.
• —Restatements change previously reported history, and the reading changes with them.
• —Five metrics is a narrow view of a company. It sees nothing of competitive position, management, litigation, customer concentration, or anything else that does not appear in these five numbers.

Limits that apply to the whole product, rather than to this factor, are on limitations.

Common questions

Fundamentals FAQ

The other five

Each factor has its own page

Back to the full methodology overview, or read why Tapeline publishes its losing days.