Q.i. Value is a ranking indicator that uses a combination of the best valuation ratios we have tested including the work from the research paper Quantitative Value Investing in Europe: What Works for Achieving Alpha.
It ranks all the companies in the screener using four valuation ratios and lets you find the most undervalued companies using different valuation ratios.
How is Qi Value calculated
Q.i. Value is calculated with the following ratios:
- EBITDA Yield (EBITDA / EV)
- Earnings Yield (EBIT / EV)
- FCF Yield (FCF / EV)
- Liquidity (Q.i.) (Operating profit / Yearly traded value)
The lower the Qi Value the more undervalued the company
The Qi Value ranking ranges from 1 to 100 and this is how it is calculated:
- We first rank all the companies in the database by each of the ratios from good to bad - from 1 to 22,000.
- We then add the four rankings of each company together and rank the whole universe by this combined ranking.
- Once all the companies are ranked we divide then into groups that make up 1% of the total universe - for example the best 1% of companies by the combined ranking get a Qi Value ranking of 1, the next 1% a ranking of 2, until 100.
- We do this to give all companies a Qi Value ranking from 1 to 100. 1 = the best ranking (most undervalued) and 100 the worse.
Remember
All ratios are calculated on a trailing 12 months (TTM) basis.
This means the last twelve months (not the company’s financial year) is compared to the same period in the past.
We do this to make sure that the screener data includes the latest, most up to date, financial results of the company.
How to use the ratio
Available as a screening ratio: Yes
Available as an output column ratio: Yes (Look in the Valuation tab)
How to select the most undervalued Qi Value companies
To find companies with the most undervalued Qi Value companies set the slider from 0% to 10%.
More information about Qi Value
You can find more information here:
Qi Value investment strategy back test
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