Our Valuation Rating indicates if a stock is selling at a relative premium or bargain price, based on its growth potential.

To estimate a stock's value relative to its current price our Valuation Rating combines:

	stock price;
	projected earnings;
	projected earnings growth;
	dividends.

By combining these elements we can establish a rating for the analyzed company.

There are five ratings, ranging from undervalued [] to overvalued [] (see below).

theScreener.com Valuation Rating
(difference between projected value and current price)

When we analyze a company's projected earnings growth, we place a certain emphasis on the G/PE Ratio. While the first two elements in our analysis are important, and fairly simple to understand (stock price and earnings), the G/PE Ratio merits further explanation.

Some analysts watch the PE (Price Earnings ratio) - the ratio of stock price divided by earnings per share. In general, this ratio is fairly linear: a low PE suggests an inexpensive/low-Sensitivity stock, while a high PE suggests an expensive/high-Sensitivity stock.

In our model, the concepts of expensive/inexpensive do not depend on the PE, but on the relation between the PE and growth. Multifactor analysis has showed that the estimated growth of earnings provides the best base for the evaluation of a stock. There is approximately a 60% correlation of estimated earnings growth to stock value.

Our Growth to PE Ratio measure quickly evaluates a company and detects firms that offer the greatest relative potential for the future and are therefore, the most undervalued. Correspondingly, our Growth to PE Ratio also detects firms that offer the least relative potential for the future and are thus, the most overvalued. Our Growth to PE Ratio measure conveniently compares two stocks at a glance. Our growth projections are always based on an average of at least three estimates.

The moment an investor buys a stock, the stock's present situation becomes the past, and the success of the investment depends fully on the future. The Corporate focuses on the future in order to establish a true Valuation Rating.