The Value Composite One (VC1) is a way of ranking companies by valuation developed by James O’Shaughnessy and explained in the latest edition of his excellent book What Works on Wall Street: The Classic Guide to the Best-Performing Investment Strategies of All Time
The VC1 factor is calculated using the following five valuation ratios:
- Price to book value
- Price to sales
- Earnings before interest, taxes, depreciation and amortization (EBITDA) to Enterprise value (EV)
- Price to cash flow
- Price to earnings
How to use the ratio
Available as a screening ratio: Yes
Available as an output column ratio: Yes
How to select the best rated Value Composite One companies
To find companies with the best Value Composite One ranking set the slider from 0% to 10%.
In the screener the VC1 has a value of between 0 (undervalued company) and 100 (expensive or overvalued company).
More information and back test
You can find more information (including back test information) here: This combined valuation ranking gives you higher returns - Value Composite One
Click here to start using the Value Composite One investment strategy in your portfolio NOW!