Hi
I am new to investing and cannot work out why Augean (LON:AUG) had its stockrank plummet from 87 on 04/03 to to 24 on 05/03 (a decline of 63 ranking places in the space of just one day). Pantheon International (LON:PIN) also suffered a similar stockrank decline, from 93 to 54 in two days.
If stockranks can be as fickle this, I am concerned about using them as part of my stock selection process.
If anyone could elucidate on why this occurred, I would be extremely grateful.
Thanks,
Jeremy
I put recent data on AUG and PIN from Stockopedia Reports into a spreadsheet in order to establish what changes caused the fall in ranking. In both cases a sudden dramatic fall in ROCE coincided with the drop in StockRank.
The question for me is: how can the ROCE drop dramatically within 24 hours. In both cases Earnings Manipulation Risk was N/A
In the case of AUG the ROCE went from +15.8% to -16.8% when they published the final results for the year. There is an explanation for why in their RNS but the stock rank system does not look at why - just what.
I have been here for a couple of years but am still getting to know some of Stocko's quirks.
In the case of Augean (LON:AUG) the first thing is to look at announcements - you will see that AUG issued year end results on Feb. 26th. These are put into the stock report a few days later. So the next thing to do is a before and after. If you click on 'Print' in the top R you will get a dropdown menu of dates. Right click on Feb 2 and March 5 and click on open in new tab. You can then flick from one to the other to spot the difference.
In this case the Feb one anticipates 2019 EPS of 14.6p but that becomes an actual of 4.51p in March. Yet the company's announcement states "Adjusted basic earnings per share increased by 80% to 15.33 pence (2018: 8.52p)"
The reason for this is that Stocko has its own rules for adjustment. Were they the same as the company I don't think it would have caused such a plummet in the rank. The reason here is that AUG is in dispute with HMRC on £32m of tax which it does not think it should pay. The matter has yet to be resolved but the company paid it in 2019 to avoid the punitive interest that it would have to pay on any amount the eventual settlement decides is payable. The company adjusts this out of its figures Stocko does not. Simples. Who is right? - see the debate at
https://www.stockopedia.com/co...
As a general non stock specific view
I think that Stockranks are a useful tool in normal market conditions. These are not normal times however and the speed and scope of Government actions on everyday companies cannot really be reflected in an accurate Stockrank.
For instance, Dart has a Stockrank of 97 - which seems well behind events.
Sharw has previously posted a number of interesting observations about the quirks in the Stockopedia system.
I think it is also to do with the large tax payment which is disputed, Augean (LON:AUG) have paid this amount to HRMC therefore the figures have been adjusted. "The Group has made payments against landfill tax assessments for its companies Augean North and Augean South for a total of £40.4m (£37.7m excluding interest)".
Also the cash has gone and the they have around £13m debt. So the figures have changed considerably. It is one reason why I never invested in Augean (LON:AUG) because of this tax dispute hanging over them.
