The ERP5 score was designed by the MFIE Capital team. It combines the Greenblatt Magic formula with ideas developed by Graham & Dodd, who advocated the use of 5 to 10 year smoothed earnings to cover full economic business cycles and dampen the effect of expansions and recessions. Finally it adds the book-to-market ratio into the mix.
Each company gets ranked according to 4 ratios:
Similar to the Greenblatt Magic formula, companies are ranked on each individual factor and the sum of this becomes the ERP5 score. The ERP5 template screen will sort companies according to this factor. If one of the ratios is missing, the company will get an ERP5 score of 99999 which will put it at the back of the list.
More details about the ERP5 score and screener can be found here.
New! The ERP5 score is now fully dynamic and is calculated on a filtered stock universe using the filters specified in the Filter Menu. The filters taken into account are: countries, markets, industries, market cap, trading value, results age and currency.