Société Générale's 'expensive stocks with poor earnings quality screen', which is published monthly, seeks to unearth the market’s most undesirable stocks -- if you're looking for short ideas the report is invaluable.
The screen is based on five value factors included in the bank’s SG Value Beta (SGVB) index and ten factors of an earnings quality score.
The value score is based on five value factors (PE, FY1 PE, PB, FCF Yield and EV to EBITDA) all taken relative to the sector median. The earnings quality score is based on the average decile rank of ten factors (Total Accruals, Accruals Volatility, Inventory, Receivables, Asset Quality, Asset Turnover, Depreciation, SG&A and R&D expenses, Profit Margin and Leverage).
Société Générale produces two screens based on these criteria; a...
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