Frequently Asked Questions
Vuru Stock Reports
Vuru Stock Reports are broken up into tabs that look at different aspects of a company.
The first tab is the Summary tab and it provides an overview of the quality of a stock. Use it as a starting point to understand its valuation and the strength of its fundamentals.
The first row of the Summary tab shows the Vuru Grade, the Current Price, and the Growth and Stability Prices. Look at the Vuru Grade to understand the overall quality score of a stock, and compare the Current Price to the Growth and Stability Prices and see how undervalued or overvalued the company is.
The next row shows bar graphs that represent the overall strength of the company's fundamentals, focused on 'Management', 'Financial Strength', 'Economic Moat' and 'Dividend & Buybacks'. These graphs represent the information that can be found in each of their respective tabs.
The rest of the Summary tab provides the company's price history, standard metrics (eg. P/E, P/B), company description and news.
Consider the Summary tab your launchpad to dig into the details of the analysis, and to understand any intricacies or patterns that might be taking place in the company. The other 5 tabs are where these details can be found.
The Valuation tab shows the intrinsic value of a company from three different perspectives: Growth, Stability and Net Current Assets. Follow the links to these topics in the FAQ for a more detailed explanation of how these valuations work.
Each of these produces a price that the stock is worth according to its intrinsic value. Comparing this with the current price that the stock is being traded at, it's easy to see whether a company is undervalued and by how much. The most important one to take into account is the Growth Price.
The parameters used to compute these prices can be adjusted with the sliders on the page. For the Growth Price, Vuru computes a growth rate based on a company's past growth, and that is used as the default. The growth rate can be adjusted if there is reason to believe that a company will grow faster or slower than that rate, and that change will instantly be reflected in the price. Adjusting this value and seeing the result is a great way to get a sense for how different growth rates would impact the intrinsic value of the company. It is also valuable to look at the Growth Rate Assumed by Market.
The other adjustment that can be made to both the Growth Price and the Stability Price is the Discount Rate. The Discount Rate is essentially a way to factor in the riskiness of a stock into its valuation, with a lower discount rate implying less risk. Vuru uses a standard 15% discount rate across all stocks by default. Adjusting the Discount Rate slightly higher or lower is a good way to factor in risk on a per-stock basis.
Fundamental Tabs (the rest)
Each of the last four tabs contains details about different aspects of the company. The Management tab looks at the performance of the company's management, from a purely quantitative perspective, over the past 10 years. The Financial Strength looks at a company's balance sheets and how well they allocate profits. The Economic Moat tab looks at how defensible a company's profit margins are based on the past 10 years. The Dividends & Buybacks tab looks at the past distribution of dividends and any history of stock buybacks the company has made.
Each of the detailed aspects within these tabs follows the same format. There is first a statement and a small bar graph, which are colour-coded to give a quick understanding of how the company has been performing in this regard. Below, there is a graph to display any trends that have been occurring, and next to it a detailed explanation about this aspect of the company. Lastly, Vuru shows the numbers behind our statements so that the numbers are interpreted and analyzed, and there is also complete transparency about how it's done. Look at the Calculations and Metrics section for more details about each of the aspects Vuru looks at.