You reported that StockGrade.com gives HD a grade of 'A'.
I ran a few other stocks through StockGrade.com. IOM, for instance. IOM closed Friday 1/4 point above a 4+ month low. Its StockGrade.com rating is 'B+' (2nd highest).
So what is an 'A' or a 'B+' worth? Here's what StockGrade.com says about its rating system:
For a Company to receive a StockGrade of "A", it must have a one year annualized rate of return reflecting monthly price appreciation plus reinvestment of monthly dividends and the compounding effect of dividends paid on reinvested dividends greater than or equal to 20%. The company must have also met all the requirements as specified in grades B+, B, B-, C+, C & C-. (See StockGrade.com's criteria for B+, B, B-, C+, C, & C-). Of the 14,373 companies in the database, 177 companies, or 1.23%, received a grade of A.
For a Company to receive a StockGrade of "B+", it must have a five year total return which is greater than the 5 year total return for the S & P 500 index. The company must have also met all the requirements as specified in grades B, B-, C+, C, & C-. (See StockGrade.com's criteria for B, B-, C+, C & C-). Of the 14,373 companies in the database, 137 companies, or 0.95%, received a grade of B+.
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So HD definitely is worth an 'A' and maybe IOM has earned its 'B+' based on a 5-year record. But StockGrade.com will never tell you if HD at $70 is overpriced. And if HD falls 30% to $45, StockGrade.com will still call it an 'A'.
As its disclaimer says, the ratings are for entertainment purposes only and should not be used as a basis for investment decisions. |
