Vgm Yahoo Finance

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VGM is a stock screening system developed by Zacks Investment Research and prominently featured on Yahoo Finance. It's designed to simplify investment decisions by assigning a single, easy-to-understand grade to stocks based on their overall investment potential. This grade, ranging from A (Strong Buy) to F (Strong Sell), consolidates various fundamental and technical factors into one metric, offering a quick snapshot of a stock's strengths and weaknesses.

The VGM score is an acronym representing Value, Growth, and Momentum. These are three key investment styles and the VGM score considers each style when calculating its final grade. Value investors seek undervalued stocks, Growth investors target companies with high growth potential, and Momentum investors follow stocks with strong recent price performance. The VGM score aims to cater to investors with different investment preferences by evaluating a stock's appeal across these three styles.

The 'Value' component evaluates a stock's price relative to its earnings, book value, sales, and cash flow. Low price-to-earnings (P/E) ratios, price-to-book (P/B) ratios, and other similar metrics suggest the stock may be undervalued compared to its intrinsic worth. Zacks analyzes these metrics relative to the industry and the stock's historical averages to determine the Value Style Score.

The 'Growth' component focuses on a company's earnings and sales growth rates, projected growth rates, and other growth-related metrics. Companies exhibiting strong and consistent growth are generally favored by Growth investors. Zacks considers both historical and future growth estimates when determining the Growth Style Score.

The 'Momentum' component examines a stock's recent price performance and earnings estimate revisions. Stocks demonstrating strong price momentum and positive earnings revisions are typically considered attractive by Momentum investors. Zacks assesses the stock's price relative to its 52-week high and low, as well as the trend of earnings estimate revisions to calculate the Momentum Style Score.

The VGM score is calculated by combining the Value, Growth, and Momentum Style Scores into a single, weighted average. Each style score is graded on a scale from A to F, and the weights are determined by Zacks' proprietary algorithm. The resulting weighted average is then translated into the final VGM grade. A stock with a high VGM score generally indicates that it possesses attractive characteristics across value, growth, and momentum factors, making it potentially a good investment opportunity. Conversely, a low VGM score suggests that the stock may be unattractive based on these factors.

While the VGM score is a helpful tool for quickly screening stocks, it's important to remember that it's just one piece of the puzzle. Investors should not rely solely on the VGM score to make investment decisions. It's crucial to conduct thorough research, including analyzing the company's financials, industry trends, competitive landscape, and management team, before investing in any stock. The VGM score can serve as a useful starting point for identifying potentially attractive stocks, but it should always be used in conjunction with other research and analysis.

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