Continued Evolution of our Models

By Jeffrey Cohen, President and Founder, US Advanced Computing Infrastructure, Inc.

We made changes to our model yesterday, analyzed the results, and wrote three Medium articles.

Today, we are making further revisions. What are we changing?

1. In our last UP run, we ended up with 25% of stocks passing data validation and our filters. We now realize those were stocks with leverage and not without leverage. We fixed that code and are re-running the model. 

2. We are also testing for both positive and non-trivial common equity (or book value). We avoid stocks where the liabilities outweigh the assets, as that creates a different type of leverage that is similar to debt. An unleveraged company maintains ownership of a meaningful portion of the assets they need to operate their business.

3. We eliminated the test for positive and non-trivial cash flow from operations as this is largely captured in the net income test.

Model is running now. Let's see what happens!