2015-08-12mbfl.ns70654198.pdf

Last Close423.50 (INR)August 11, 2015INDIA NATIONAL Exchange

Avg Daily Vol302,558

52-Week High469.60

Trailing PE13.6

Annual Div16.00

ROE12.7%

LTG Forecast8.7%

1-Mo Return4.9%

Market Cap89.6B

52-Week Low331.10

Forward PE12.3

Dividend Yield3.8%

Annual Rev58.0B

Inst Own26.9%

3-Mo Return9.3%

AVERAGE SCORE

POSITIVE OUTLOOK: MPHASIS's current scoreof 9 places it within the top 15% of stocks scored.

Score Averages

Software & IT Services Group: 4.6 Mid Market Cap: 6.9Software & IT Services Sector: 4.6 S&P BSE SENSEX Index: 7.2

Positive

Neutral

Negative

Average Score Trend (4-Week Moving Avg)

AUG-2012 AUG-2013 AUG-2014 AUG-2015

Peers -6M -3M -1M -1W Current 1Y Trend

MPHASIS 5 8 8 9 9

VAKRANGEE 3 6 8 8 8

MINDTREE 10 6 4 6 6

HEXAWARE 6 4 4 5 5

TECHM 9 6 5 6 5

HIGHLIGHTS THOMSON REUTERS I/B/E/S MEAN- The score for MphasiS last changed from 8 to 9 on 08/02/15.

- The recent change in the Average Score was primarily due toan improvement in the Earnings and Fundamental componentscores.

Hold Mean recommendation from all analysts coveringthe company on a standardized 5-point scale.24 Analysts

Sell Reduce Hold BuyStrong

Buy

PRICE AND VOLUME CHARTS1-Year Return: -0.8% 5-Year Return: -31.1%

BUSINESS SUMMARYMphasis Limited, formerly known as Mphasis BFL Limited is an India-based Information Technology solutions provider offering Applications, BusinessProcess Outsourcing (BPO) and Infrastructure services. The Company specializes in providing a suite of application development and maintenanceservices, infrastructure outsourcing services and business process outsourcing solutions to clients worldwide. Service categories include ApplicationDevelopment, Maintenance & Modernization, Specialized Services, Enterprise Architecture, Integration and Business Process Management Servicesetc. ?Its segment includes Banking and Capital Market, Insurance, Information Technology, Communication and Entertainment and EmergingIndustries. The Company is a subsidiary of Hewlett-Packard (HP).

MPHASIS (MPHASIS-IN)Software & IT Services / Software & IT Services / IT Services & Consulting DETAILED STOCK REPORT

Report Date: August 12, 2015

of 11© 2015 Thomson Reuters. All rights reserved.

INDICATOR COMPONENTS

The AVERAGE SCORE combines the quantitative analysis of five widely-used investment decision making tools: Earnings,Fundamental, Relative Valuation, Risk, and Price Momentum. A simple average of the underlying component ratings is normallydistributed to rank stocks on a 1-10 scale (10 being awarded to the most favorable). These factors may be evaluated differently usingalternative methodologies and the importance of individual factors varies across industries, market capitalization and investment styles.Additional criteria should always by used to evaluate a stock.

Earnings Fundamental Relative Valuation Risk Price Momentum

PEER ANALYSIS Currency in INR

PRICE MOMENTUM VALUATION FUNDAMENTAL ANALYSTS

AverageScore Ticker

Price(08/11/15)

1-MoReturn

3-MoReturn

1-YrReturn

MarketCap

TrailingPE

ForwardPE

DividendYield

NetMargin

LTGForecast

I/B/E/SMean

# ofAnalysts

9 INFY 1,109.15 18.3% 11.3% 24.2% 2.5T 20.3 19.1 2.0% 21.1% 10.8% Buy 53

7 WIPRO 566.15 3.2% 4.6% 4.3% 1.4T 16.0 14.9 2.1% 17.9% 11.6% Hold 49

7 HCLTECH 940.40 1.6% -0.2% 24.1% 1.3T 18.3 16.8 1.7% -- 11.5% Buy 52

5 TECHM 540.65 14.1% -14.4% 0.1% 514.7B 19.8 17.2 1.1% 10.7% 21.7% Buy 50

6 MINDTREE 1,378.95 14.7% 8.5% 36.9% 108.8B 21.3 19.4 1.2% 11.9% 14.2% Hold 32

9 MPHASIS 423.50 4.9% 9.3% -0.8% 89.6B 13.6 12.3 3.8% 10.4% 8.7% Hold 24

5 HEXAWARE 279.10 9.6% 9.2% 88.5% 84.1B 23.8 19.5 3.0% 12.8% -- Hold 23

8 VAKRANGEE 166.65 14.3% 52.8% 24.5% 84.0B 81.7 -- 0.2% 10.9% -- Strong Buy 1

8 CYIENT 549.85 -2.0% 8.2% 39.1% 60.9B 17.2 15.2 1.5% 10.3% -- Buy 16

6 CMC 2,006.45 4.4% 2.5% 8.4% 59.7B 21.9 20.7 0.9% 8.4% -- Strong Buy 1

7 PERSISTENT 713.90 17.0% 2.3% 16.8% 55.6B 19.8 17.6 1.1% 13.4% 46.2% Hold 26

7 Average 788.61 9.1% 8.5% 24.2% 570.7B 24.9 17.3 1.7% 12.8% 17.8% Buy 29.7

PEER COMPANIESINFY Infosys HEXAWARE Hexaware TechnologiesWIPRO Wipro VAKRANGEE VakrangeeHCLTECH HCL Technologies CYIENT CyientTECHM Tech Mahindra CMC CMCMINDTREE MindTree PERSISTENT Persistent Systems




EARNINGS

NEUTRAL OUTLOOK: Mixed earningsexpectations and performance.

Currency in INR

Earnings Score Averages


Positive

Neutral

Negative

Earnings Score Trend (4-Week Moving Avg)

AUG-2012 AUG-2013 AUG-2014 AUG-2015


MINDTREE 9 5 2 6 6

MPHASIS NR NR 5 6 6

HEXAWARE 3 2 4 5 5

TECHM 1 3 1 4 1

VAKRANGEE 4 NR NR NR NR

EARNINGS INDICATORSEarnings Surprises

(33.3% weight)Estimate Revisions

(33.3% weight)Recommendation Changes

(33.3% weight)

MPHASISMINDTREEHEXAWAR…

TECHM

VAKRANG…

HEXAWAR…

MINDTREEMPHASIS

TECHM

VAKRANG…

MPHASIS

TECHMHEXAWAR…MINDTREE

VAKRANG…

Last 4 Quarters Last 4 Weeks Last 120 Days

# Positive Surprises (> 2%) 2 # Up Revisions 0 # Broker Upgrades 2# Negative Surprises (< -2%) 1 # Down Revisions 1 # Broker Downgrades 2# In-Line Surprises (within 2%) 1 Avg Up Revisions 0.0%Avg Surprise -1.0% Avg Down Revisions -4.2%

HIGHLIGHTS PRICE TARGET- MphasiS currently has a relatively neutral Earnings Rating of 6. The

average Earnings Rating for its IT Services & Consulting industry is 5.8and the CNX 500 index average is 5.5.

- On 07/29/15, the company announced quarterly earnings of 8.27 pershare, relatively in-line with the consensus 8.34. Over the past 4quarters, the company has reported 2 positive, 1 negative, and 1 in-line surprises. The average surprise for this time period has been -1.0%.

- There have been 2 upward and 2 downward broker recommendationchanges for MphasiS over the past 120 days.

The chart indicates where analysts predict the stock price will be withinthe next 12 months, as compared to the current price.

520

480

440

400

360

320Current Price Price Target

423.50

MEAN

HIGH

LOW

12-Month Price Target

Mean 400.00High 520.00Low 340.00Target vs. Current -5.5%

# of Analysts 24




EARNINGS PER SHARE

Earnings per share (EPS) is calculatedby dividing a company's earnings by thenumber of shares outstanding. Analyststend to interpret a pattern of increasingearnings as a sign of strength and flator falling earnings as a sign ofweakness.

The charts provide a comparisonbetween a company's actual andestimated EPS, including the high andlow forecasts.

9.000

8.700

8.400

8.100

7.800

7.50009-14 12-14 03-15 06-15 09-15 12-15

Actuals Estimates

7.620

7.850

8.450

8.270

MEANHIGH

LOW

Quarterly 09-15 12-15Mean 8.300 9.000High 8.300 9.000Low 8.300 9.000# of Analysts 1 1

49.00

42.00

35.00

28.00

21.00

14.002014 2015 2016 2017

Actuals Estimates

14.70

32.20MEAN

HIGH

LOW

Annual 2016 2017Mean 34.530 38.580High 39.000 47.000Low 32.500 34.900# of Analysts 23 23

MEAN ESTIMATE TREND ANALYST RECOMMENDATIONSQ

09-15Q

12-15Y

2016Y

2017Price

TargetCurrent 8.300 9.000 34.530 38.580 411.0030 Days Ago 8.500 9.000 34.830 38.210 397.0090 Days Ago -- -- 34.860 38.510 392.00% Change (90 Days) -- -- -0.9% 0.2% 4.8%

Next Expected Report Date: 11/19/15

Thomson Reuters I/B/E/S Mean: Hold (24 Analysts)

Strong Buy

Buy

Hold

Reduce

Sell

2

5

8

8

1

EARNINGS SURPRISESComparing a company's actual earnings to the mean expectation ofanalysts results in a difference referred to as a 'positive' or 'negative'surprise. Research has shown that when a company reports asurprise, it is often followed by more of the same surprise type.

Surprise Detail (Last 6 Periods)

SurpriseType

AnnounceDate

Period EndDate

ActualEPS

MeanEPS

Surprise(%)

IN-LINE 07/29/15 06/30/15 8.270 8.340 -0.8%

POSITIVE 05/23/15 03/31/15 8.450 7.717 9.5%

POSITIVE 02/13/15 12/31/14 7.850 7.643 2.7%

NEGATIVE 10/29/14 09/30/14 7.620 8.995 -15.3%

NEGATIVE 07/30/14 06/30/14 8.310 8.657 -4.0%

NEGATIVE 05/14/14 03/31/14 5.800 6.675 -13.1%

Surprise Summary (Last 12 Quarters)

Surprise Type Amount PercentPositive Quarters (> 2%) 3 25.0%Negative Quarters (< -2%) 6 50.0%In-Line Quarters (within 2%) 3 25.0%

ANNUAL REVENUEA pattern of increasing sales inconjunction with a rising EPS mayinfluence a buy recommendation, whileflat or falling sales and falteringearnings may explain a sellrecommendation. A rising EPS with flator falling sales may result fromincreased cost efficiency and margins,rather than market expansion. Thischart shows the sales forecast trend ofall analysts and the highest and lowestprojections for the current and nextfiscal year.

120B

100B

80B

60B

40B

20B2014 2015 2016 2017

Actuals Estimates

25.9B

57.9BMEANHIGH

LOW

2016 2017Mean 59.9B 64.2BHigh 64.3B 73.5BLow 56.3B 57.4BForecasted Growth 3.4% 10.8%

# of Analysts 23 23




FUNDAMENTAL

POSITIVE OUTLOOK: Strong fundamentalssuch as high profit margins, low debt levels, orgrowing dividends.

Fundamental Score Averages


Positive

Neutral

Negative

Fundamental Score Trend

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q22013 2014

PeersQ3

2014Q4

2014Q1

2015Q2

2015 Current 3Y Trend

VAKRANGEE 2 3 10 10 10

MPHASIS NR NR 5 8 9

TECHM 10 10 10 10 9

MINDTREE 8 9 NR NR 8

HEXAWARE 5 6 6 6 7

FUNDAMENTAL INDICATORSProfitability(25% weight)

Debt(25% weight)

Earnings Quality(25% weight)

Dividend(25% weight)

MINDTR…VAKRA…HEXAW…TECHMMPHASI…

HEXAW…MINDTR…TECHMVAKRA…MPHASI…

MPHASI…TECHMVAKRA…

HEXAW…MINDTR…

MPHASI…VAKRA…MINDTR…TECHM

HEXAW…

Revenue Growth 5.6%For year over yearending 10/13Gross Margin 19.0%For trailing 4 qtrsending 06/15Return On Equity 12.7%For trailing 4 qtrsending 03/15Net Margin 10.4%For trailing 4 qtrsending 06/15

Current Ratio 2.6For year over yearending 03/15Debt-to-Capital 5.3%For trailing 4 qtrsending 03/15Interest Funding --For trailing 4 qtrsending --Interest Coverage 34.2For trailing 4 qtrsending 06/15

Days Sales In Inv. 3.6For period ending03/15Days Sales In Rec. 69.9For period ending03/15

Div. Growth Rate 128.6%For year over yearending 06/15Dividend Funding --For trailing 4 qtrsending --Dividend Coverage 0.9For trailing 4 qtrsending 03/14Current Div. Yield 3.8%For trailing 4 qtrsending 08/15

HIGHLIGHTS- The Fundamental Rating for MphasiS improved significantly over the

last quarter from 5 to 9. The current rating is considerably morebullish than the Software & IT Services Industry Group average of 4.8.

- The company's gross margin has been higher than its Industry Groupaverage for each of the past five years.

- The company's current ratio has been higher than its Industry Groupaverage for each of the past five years.

- The company's days sales in receivables has been lower than itsIndustry Group average for each of the past five years.

- Of the 194 firms within the Software & IT Services Industry Group,MphasiS is among 60 companies that pay a dividend. The stock'sdividend yield is currently 3.8%.




RELATIVE VALUATION

NEUTRAL OUTLOOK: Multiples relatively in-linewith the market.

Relative Valuation Score Averages


Positive

Neutral

Negative

Relative Valuation Score Trend (4-Week Moving Avg)

AUG-2012 AUG-2013 AUG-2014 AUG-2015


MPHASIS NR NR 7 7 7

TECHM 3 4 5 5 5

HEXAWARE 3 3 3 3 3

MINDTREE 3 3 3 4 3

VAKRANGEE 3 2 1 1 1

RELATIVE VALUATION INDICATORSPrice to Sales

(50% weight)Trailing PE(25% weight)

Forward PE(25% weight)

MPHASISTECHM

HEXAWAR…MINDTREEVAKRANG…

MPHASIS

MINDTREETECHMHEXAWAR…

VAKRANG…

MPHASISMINDTREETECHMHEXAWAR…

VAKRANG…

Price to Sales 1.5

5-Yr Average --

Rel. to 5-Yr Avg. --

S&P BSE SENSEX Index 3.6

Rel. to S&P BSE SENSEX 57% Discount

Trailing PE 13.6

5-Yr Average --




Forward PE 12.3

5-Yr Average --




HIGHLIGHTS- MphasiS currently has a Relative Valuation Rating of 7 which is

significantly above the S&P BSE SENSEX index average rating of 5.0.- Compared to the Software & IT Services Group, MPHASIS is currently

trading at a significant discount based on both Price to Sales ratio andTrailing P/E.

- Based on Price to Sales, MPHASIS currently trades at a 43%Discount to its Software & IT Services Group peers. On average, thecompany has traded at a -- over the past five years.

- Based on Trailing P/E, MPHASIS currently trades at a 39% Discountto its Software & IT Services Group peers. On average, the companyhas traded at a -- over the past five years.

- Based on Forward P/E, MPHASIS currently trades at a 29% Discountto its Software & IT Services Group peers. On average, the companyhas traded at a -- over the past five years.




PRICE TO SALESThe most recent week's close price divided by the revenue per share.

Price to Sales: 1.55-Year Average: --

S&P BSE SENSEX Index Average: 3.6Software & IT Services Group Average: 2.7

1.21.41.61.82.02.22.42.62.83.03.2

20152014201320122011

TRAILING PEThe most recent week's close price divided by the sum of the four mostrecently reported quarterly earnings.

Trailing PE: 13.65-Year Average: --


89101112131415161718

20152014201320122011

FORWARD PEThe most recent week's close price divided by the sum of the fourupcoming quarterly consensus estimates.

Forward PE: 12.35-Year Average: --


910111213141516171819

20152014201320122011

FORWARD PEGThe Forward P/E divided by the five-year forecasted growth rate.

Forward PEG: 1.45-Year Average: --


0.50.60.70.80.91.01.11.21.31.41.5

20152014201320122011




RISK

POSITIVE OUTLOOK: Consistent returnpatterns (low volatility).

Risk Score Averages


Positive

Neutral

Negative

Risk Score Trend (4-Week Moving Avg)

AUG-2012 AUG-2013 AUG-2014 AUG-2015


MINDTREE 10 10 10 10 10

MPHASIS NR NR 10 10 10

TECHM 10 10 9 9 9

HEXAWARE 9 8 8 8 8

VAKRANGEE 5 7 8 8 8

RISK INDICATORSMagnitude Of Returns

(25% weight)Volatility

(25% weight)Beta (1-year)(25% weight)

Correlation(25% weight)

MINDTR…MPHASI…HEXAW…TECHM

VAKRA…

MINDTR…MPHASI…TECHMHEXAW…

VAKRA…

MPHASI…

MINDTR…TECHMVAKRA…

HEXAW…

HEXAW…MINDTR…VAKRA…

MPHASI…TECHM

Daily Returns (Last 90 Days)Best 6.0%Worst -2.7%Monthly Returns (Last 60 Months)Best 30.8%Worst -34.8%

Standard DeviationLast 90 Days 1.53Last 60 Months 9.80Intra-Day Swing (Last 90 Days)Average 2.9%Largest 12.6%

Beta vs. S&P BSESENSEX

0.27

Positive Days Only -0.02Negative Days Only 0.37Beta vs. Group 0.35Positive Days Only 0.48Negative Days Only 0.67

Correlation vs. S&P BSESENSEXLast 90 Days 27%Last 60 Months 32%Correlation vs. GroupLast 90 Days 27%Last 60 Months 41%

HIGHLIGHTS- MphasiS currently has a Risk Rating of 10 while the S&P BSE

SENSEX index has an average rating of 9.7.- On days when the market is up, MPHASIS shares remain

relatively unchanged. On days when the market is down, theshares generally decrease less than the S&P BSE SENSEXindex.

- In both short-term and long-term periods, MPHASIS has shownaverage correlation (> 0.2 and < 0.4) with the S&P BSESENSEX index. Thus, this stock would provide only averagelevels of diversification to a portfolio similar to the broadermarket.

- Over the last 90 days, MPHASIS shares have been less volatilethan the overall market, as the stock's daily price has fluctuatedless than 96% of S&P BSE SENSEX index firms.

RISK ANALYSISLast 90 Days Last 60 Months

Peers

BestDaily

Return

WorstDaily

Return

#Days

Up

#Days

Down

LargestIntra-Day

Swing

BestMonthlyReturn

WorstMonthlyReturn

MPHASIS 6.0% -2.7% 31 35 12.6% 30.8% -34.8%

HEXAWARE 5.3% -5.5% 38 28 9.6% 47.1% -23.0%

MINDTREE 5.4% -5.1% 32 34 7.9% 21.6% -32.7%

TECHM 3.5% -14.2% 33 33 10.5% 20.1% -17.3%

VAKRANGEE 10.9% -5.0% 42 23 21.5% 40.9% -39.9%

S&P BSESENSEX

1.5% -2.4% 35 30 2.8% 11.7% -10.6%




PRICE MOMENTUM

NEUTRAL OUTLOOK: Performance relativelyin-line with the market.

Currency in INR

Price Momentum Score Averages


Positive

Neutral

Negative

Price Momentum Score Trend (4-Week Moving Avg)

AUG-2012 AUG-2013 AUG-2014 AUG-2015


VAKRANGEE 5 4 9 9 9

MPHASIS NR NR 6 6 6

HEXAWARE 9 5 3 6 4

MINDTREE 8 5 1 4 4

TECHM 8 4 1 2 2

PRICE MOMENTUM INDICATORSRelative Strength

(70% weight)Seasonality(30% weight)

VAKRANG…

MPHASISHEXAWAR…MINDTREE

TECHM

VAKRANG…MINDTREETECHM

MPHASISHEXAWAR…

Relative Strength Indicator (scale 1-100, 100 is best)MPHASIS Industry Avg

Last 1 Month 58 54Last 3 Months 55 52Last 6 Months 53 52

Average Monthly Return (Last 10 Years)AUG SEP OCT

Company Avg 2.3% 0.6% -0.1%

Industry Avg 4.0% 2.2% -3.2%

Industry Rank 30 of 87 65 of 86 59 of 86

PRICE PERFORMANCEDaily close prices are used to calculate theperformance of the stock as compared to arelevant index over five time periods.

MPHASIS

CNX 500

1-Week

1-Month

3-Month

YTD

1-Year

-2.7%-0.5%

4.9%2.4%

9.3%3.8%

9.9%4.8%

-0.8%16.1%

MPHASIS CNX 500Close Price (08/11/15) 423.50 710152-Week High 469.60 720252-Week Low 331.10 6747

- On 08/11/15, MPHASIS closed at 423.50, 9.8% below its 52-week high and 27.9% above its 52-week low.

- MPHASIS shares are currently trading 5.1% above their 50-day moving average of 402.89, and 9.3% above their 200-daymoving average of 387.56.

- The CNX 500 index is currently 1.4% below its 52-week highand 5.3% above its 52-week low.




DETAILED STOCK REPORT TIPS

The Thomson Reuters Stock Report is a comprehensive, company-specific analysis that includes a proprietary Stock Rating along with underlying component indicators and supportive data elements. The report is updated daily, although some of the data elements and the ratings are updated weekly.

Average Score The Average Score combines a quantitative analysis of five widely-used investment decision making tools - Earnings, Fundamental, Relative Valuation, Risk, and Price Momentum. First, a simple average of the five underlying component ratings is calculated. Then, a normal distribution is used to rank each stock across the market on a scale of 1 to 10, with 10 being most favorable. A score of 8 to 10 is considered positive, 4 to 7 is neutral, and 1 to 3 is negative. These five factors may be evaluated differently using alternative methodologies, and the importance of individual factors varies across industry groups, market capitalization and investment styles. Additional criteria should always be used to evaluate a stock.

A company must have sufficient data available for at least three of the five component indicators in order to receive an overall Average Score. Approximately 85% of the stocks within the coverage universe meet the criteria to generate a score.

Indicator Components The five indicators that comprise the stock rating are displayed. Like the stock rating, the component rating scale is 1 to 10, with 10 being best. A company will receive an ‘NR’ for No Rating if the required data elements or criteria are not met. A detailed section for each component is included in the report.

Indicator Trends Within each component section, historical score trends are displayed, typically using a 4-week moving average over a timeframe of the past three years. The dotted orange line indicates the average of the scores over those three years. The most recent occurrence of the best and worst scores are also displayed on the chart in grey boxes to put the current score into historical context.

Next to the trend chart for the company, current score averages are included, along with peer company comparisons of values from 6 months ago, 3 months ago, 1 month ago, the most recent value from 1 week ago, and the current score. The four closest industry peers are presented based on similar market capitalization.

Peer Analysis ・ The Thomson Reuters Business Classification (TRBC) system is used for

industry comparisons. It is designed to track and display the primary business of a corporation by grouping together correlated companies that offer products and services into similar end markets. The system includes 10 Economic Sectors, 28 Business Sectors, 54 Industry Groups, and 136 Industries.

・ The Peer Analysis section of the report compares the company to its ten closest peers. The peers are selected from the industry based on similar market capitalization. The peer listing may have fewer than ten companies if there are fewer than ten companies within that industry classification.

Highlights The Thomson Reuters proprietary automated text-generation system creates highlights summarizing the most noteworthy data. The bullets will vary by company and will change from week to week as different criteria are met.

Earnings The Earnings Rating is based on a combination of three factors: earnings surprise, estimate revision, and recommendation changes. Each factor is equally weighted. Then, equal deciles are used to rank each stock across the market on a scale of 1 to 10, with 10 being most favorable. A stock needs to have at least two of the three earnings factors in order to receive a score.

・ Earnings Surprises - The number of positive and negative surprises within the last 4 periods (quarters or years).

・ Estimate Revisions - The number of up and down revisions and the average percentage change of those revisions within a 4 week period.

・ Recommendation Changes - The number of broker upgrades and downgrades in the last 120 days.

Price Target The price target is based on the predictions of analysts covering the stock and shows the high, low and mean price expected within the next 12 months.

Earnings Per Share The quarterly and annual earnings per share are presented when available, along with the mean, high and low. Quarterly data is displayed for the past 4 quarters (actual) and the next 2 quarters (estimated). Annual data is displayed for the past 2 years (actual) and the next 2 years (estimated).

Mean Estimate Trend The mean estimates show how the consensus has changed over the past 30 days and 90 days for the upcoming two quarters (when available) and two years. The percentage change is calculated for the company as a means for comparison by measuring the difference between the current consensus estimate and that of 90 days ago.

Analyst Recommendations The Thomson Reuters I/B/E/S Mean is the mean recommendation of all analysts covering the stock. The recommendations are presented on a five-point standardized scale: strong buy, buy, hold, reduce, and sell.

Earnings Surprises ・ The surprise summary includes the total number of time periods (and

percentage) in the last 12 quarters (quarterly) or last 4 years (annual) in which earnings surprises were positive, negative, or in-line. In order to be recognized as a positive or negative surprise, the percent must be greater than 2% above or 2% below the consensus, respectively.

・ The surprise detail section includes a listing of the company's quarterly earnings reported for the most recent 6 periods (quarters or years). The consensus analyst estimate is provided to determine if the actual earnings report represented a positive surprise, negative surprise, or in-line result.

Fundamental The Fundamental Rating is based on a combination of four fundamental component factors: profitability, debt, earnings quality, and dividend. Companies that do not pay a dividend are not penalized. Each factor is equally weighted. Then, equal deciles are used to rank each stock across the market on a scale of 1 to 10, with 10 being most favorable. A stock needs to have at least three of the four fundamental factors present in order to receive a score.

・ Profitability is comprised of four data elements. - Revenue Growth: (Net Sales – Previous Net Sales) / Previous Net Sales - Gross Margin: Gross Profit / Net Sales - Return on Equity: Net Income / Total Equity - Net Margin: Net Profit / Net Sales

・ Debt is comprised of four data elements. - Current Ratio: Current Assets / Current Liabilities - Debt-to-Capital: Total Debt / Total Capital - Interest Funding: Interest Expense / Operating Cash Flow - Interest Coverage: (Pre-Tax Income + Interest Expense) / Interest Expense

・ Earnings Quality is comprised of two data elements. - Days Sales in Inventory: 365 / (Cost of Goods Sold / Inventory) - Days Sales in Receivables: 365 / (Net Sales (Revenues) / Receivables)

・ Dividend is comprised of four data elements. The company must have a current dividend yield. - Dividend Growth Rate: (Dividends per Share – Previous Dividends per Share)

/ Previous Dividends per Share - Dividend Funding: Dividends / Operating Cash Flow - Dividend Coverage: (Pre-Tax Income + Interest Expense) / (Interest Expense

+ Dividends) - Dividend Yield: Annual Dividends per Share / Current Market Price per Share

Indicator Trend The fundamental indicator trend displays either quarterly scores over the past three years or annual scores over the past six years, depending on the reporting periods for the country. The best and worst scores can be easily determined from the values shown on the chart for each quarter or year.

Relative Valuation The Relative Valuation Rating is based on a combination of three component factors: Price to Sales (50% weight), Trailing P/E (25% weight), and Forward P/E (25% weight). After the weightings are considered to combine individual factors, equal deciles are used to rank each stock across the market on a scale of 1 to 10, with 10 being most favorable. These common valuation metrics are evaluated against the overall market, the index, and the company's own historic 5-year averages. A stock needs to have at least one of the three relative valuation factors in order to receive a score.

・ Price to Sales: Close Price / (Sales for 4 Quarters or 1 Year / Shares Outstanding)

・ Trailing P/E: Close Price / Most Recent 4 Quarters or 1 Year of Earnings ・ Forward P/E: Close Price / Upcoming 4 Quarters or 1 Year of Earnings

Valuation Averages Negative values are excluded when calculating the averages. A maximum value of 100 is placed on Trailing P/E and Forward P/E, a maximum value of 5 is placed on Forward PEG, and a maximum value of 20 is placed on Price to Sales when calculating the averages. Higher values are rounded down to the maximum for the averages.




Valuation Multiples The valuation multiples provide the Trailing P/E, Forward P/E, Forward PEG, and Price to Sales for the company and the S&P 500 index average. In addition, a comparison of the current company’s values to its 5-year average and an industry average are presented. A discount occurs when the company’s ratio is valued more favorably (lower) than that to which it is compared.

Risk The Risk Rating displays stocks on a scale of 1 to 10 with 10 being awarded to the least risky stocks. It is derived by looking at a series of long-term (5-year) and short-term (90-day) stock performance measures including volatility, magnitude of returns, beta, and correlation. Each factor is equally weighted. Then, equal deciles are used to rank each stock across the market. A stock needs to have at least two of the four risk factors in order to receive a score.

・ Magnitude of Returns – The best / worst daily returns in the past 90 days and the best / worst monthly returns in the past 60 months.

・ Volatility – The standard deviation of the stock price over the last 90 days and last 60 months, along with the average and largest intra-day stock swing.

・ Beta – Measures the tendency of a security’s returns to respond to swings in the market, based on the beta of the company versus the relevant index.

・ Correlation – Determines how closely the returns of the stock and the relevant index move together, measured over the last 90 days and last 60 months.

Risk Analysis Price analysis for the company and the relevant index is provided over two time periods. Daily analysis is provided for the last 90 days, whereas monthly statistics are used for the last 60 months.

Price Momentum The Price Momentum Rating is based on a combination of two technical performance factors: relative strength (70% weight) and seasonality (30% weight). After the weightings are considered to combine individual factors, equal deciles are used to rank each stock across the market on a scale of 1 to 10, with 10 being most favorable. A stock needs to have data for the relative strength factor in order to receive a score.

・ Relative Strength – The relative strength of the company for the last 1 month, 3 months, and 6 months on a scale of 1 to 100.

・ Seasonality – The average monthly return (price performance) for the current month and next 2 months for the company and industry, over the past 10 years. A lower industry rank indicates a higher return.

Price Performance Daily close prices are used to calculate the price performance of the stock. The performance of the relevant index is also displayed as a means of comparison.

DISCLAIMER

All information in this report is assumed to be accurate to the best of our ability. Past performance is not a guarantee of future results. The information contained in this report is not to be construed as advice and should not be confused as any sort of advice. Investors should consider this report as only a single factor in making their investment decision.




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