How We Rate Stocks

Using the price/fair value ratio, investors can get an idea of where a company's share price stands in relation to its estinated fair price. For example, a P/FV ratio of 1 suggests a stock is perfectly fairly valued, whereas one with a ratio 0.50 is 50% undervalued.

“We believe appreciation beyond a fair risk-adjusted return is highly likely over a multiyear time frame. ... the current market price represents an excessively pessimistic outlook, limiting downside risk and maximizing upside potential. This rating encourages investors to consider an overweight position in the security”