{"id":1463521,"date":"2013-08-26T17:16:19","date_gmt":"2013-08-26T11:46:19","guid":{"rendered":"http:\/\/stockviz.biz\/index.php\/?p=1463521"},"modified":"2013-08-26T17:16:19","modified_gmt":"2013-08-26T11:46:19","slug":"whats-your-gpa","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2013\/08\/26\/whats-your-gpa\/","title":{"rendered":"What&#8217;s your GPA?"},"content":{"rendered":"<p>Gross Profitability to Total Assets (GPA) is the ratio of the firm&#8217;s gross pro\ufb01ts (revenues minus cost of goods sold) to its assets. Gross pro\ufb01tability has been shown to have far more power than earnings in predicting returns. Gross pro\ufb01ts is the cleanest accounting measure of true economic pro\ufb01tability. The farther down the income statement one goes, the more polluted pro\ufb01tability measures become, and the less related they are to true economic pro\ufb01tability. Investors who are interested in the literature can read <strong>The Other Side of Value: The Gross Pro\ufb01tability Premium<\/strong> by <strong>Robert Novy-Marx<\/strong> (<a href=\"http:\/\/rnm.simon.rochester.edu\/research\/OSoV.pdf\" target=\"_blank\">pdf<\/a>)<\/p>\n<p>For the companies for which we have 5 years worth of financials available, 20 stocks with the best GPA score are:<br \/>\nRSSOFTWARE [stockquote]RSSOFTWARE[\/stockquote]<br \/>\nGEOMETRIC [stockquote]GEOMETRIC[\/stockquote]<br \/>\nCOLPAL [stockquote]COLPAL[\/stockquote]<br \/>\nZENSARTECH [stockquote]ZENSARTECH[\/stockquote]<br \/>\nTATAELXSI [stockquote]TATAELXSI[\/stockquote]<br \/>\nNIITTECH [stockquote]NIITTECH[\/stockquote]<br \/>\nTHINKSOFT [stockquote]THINKSOFT[\/stockquote]<br \/>\nINFINITE [stockquote]INFINITE[\/stockquote]<br \/>\nECLERX [stockquote]ECLERX[\/stockquote]<br \/>\nALLSEC [stockquote]ALLSEC[\/stockquote]<br \/>\nHINDUNILVR [stockquote]HINDUNILVR[\/stockquote]<br \/>\nBRITANNIA [stockquote]BRITANNIA[\/stockquote]<br \/>\nINFOTECENT [stockquote]INFOTECENT[\/stockquote]<br \/>\nZYDUSWELL [stockquote]ZYDUSWELL[\/stockquote]<br \/>\nPERSISTENT [stockquote]PERSISTENT[\/stockquote]<br \/>\nTCS [stockquote]TCS[\/stockquote]<br \/>\nTTKPRESTIG [stockquote]TTKPRESTIG[\/stockquote]<br \/>\nMASTEK [stockquote]MASTEK[\/stockquote]<br \/>\nTECHM [stockquote]TECHM[\/stockquote]<br \/>\nPAGEIND [stockquote]PAGEIND[\/stockquote]<\/p>\n<p>The bottom 10 are:<\/p>\n<p>SOUTHBANK [stockquote]SOUTHBANK[\/stockquote]<br \/>\nCUB [stockquote]CUB[\/stockquote]<br \/>\nDCB [stockquote]DCB[\/stockquote]<br \/>\nESL [stockquote]ESL[\/stockquote]<br \/>\nSYNDIBANK [stockquote]SYNDIBANK[\/stockquote]<br \/>\nYESBANK [stockquote]YESBANK[\/stockquote]<br \/>\nUNIONBANK [stockquote]UNIONBANK[\/stockquote]<br \/>\nVIJAYABANK [stockquote]VIJAYABANK[\/stockquote]<br \/>\nUNITEDBNK [stockquote]UNITEDBNK[\/stockquote]<br \/>\nUCOBANK [stockquote]UCOBANK[\/stockquote]<\/p>\n<p>The bottom 10 non-financial stocks:<\/p>\n<p>ESL [stockquote]ESL[\/stockquote]<br \/>\nIBPOW [stockquote]IBPOW[\/stockquote]<br \/>\nSUNTECK [stockquote]SUNTECK[\/stockquote]<br \/>\nRPOWER [stockquote]RPOWER[\/stockquote]<br \/>\nSREINFRA [stockquote]SREINFRA[\/stockquote]<br \/>\nGREENPOWER [stockquote]GREENPOWER[\/stockquote]<br \/>\nUNITECH [stockquote]UNITECH[\/stockquote]<br \/>\nMANJEERA [stockquote]MANJEERA[\/stockquote]<br \/>\nGAMMNINFRA [stockquote]GAMMNINFRA[\/stockquote]<br \/>\nMURLIIND [stockquote]MURLIIND[\/stockquote]<\/p>\n<p>GPA favors &#8216;asset light&#8217; companies over infrastructure and capital intensive ones. For example, banks with a retail presence will obviously under-perform software services companies. But its a useful measure to discern between stocks within the same sector.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gross Profitability to Total Assets (GPA) is the ratio of the firm&#8217;s gross pro\ufb01ts (revenues minus cost of goods sold) to its assets. Gross pro\ufb01tability has been shown to have far more power than earnings in predicting returns. Gross pro\ufb01ts is the cleanest accounting measure of true economic pro\ufb01tability. The farther down the income statement &hellip; <\/p>\n","protected":false},"author":2,"featured_media":1463761,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[2481],"class_list":["post-1463521","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-your-money","tag-quantitative-value","entry"],"_links":{"self":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/1463521","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/comments?post=1463521"}],"version-history":[{"count":0,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/1463521\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/media\/1463761"}],"wp:attachment":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/media?parent=1463521"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/categories?post=1463521"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/tags?post=1463521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}