DCA Fundamentals 1.0

17 de dez. de 2024

DCA Fundamentals 1.0

Description:

DCA Fundamentals 1.0 is an invite-only indicator designed to help traders and investors make informed decisions by analyzing key fundamental metrics of a company. It aggregates essential financial data—such as book value, earnings per share, total equity, total debt, net income, and total revenue—to provide a comprehensive overview of the stock’s intrinsic value and risk profile. By examining factors like the debt-to-equity ratio and dynamically computing Buffet’s Limit, this tool assists in identifying whether a stock may be undervalued, fairly valued, or overvalued.



Key Features:

Intrinsic Value Calculation: Estimates a stock’s intrinsic worth using a weighted combination of book value per share and EPS.

Buffet’s Limit & Margin of Safety: Adjusts intrinsic value based on the company’s debt-to-equity ratio, providing a margin of safety percentage to gauge potential investment risk.

Debt Warning: Highlights when the debt-to-equity ratio exceeds 2, signaling possible financial instability.

Data Visualization: Displays equity, debt, net income, and revenue as area plots or histograms, helping users quickly assess financial health.

Investment Status: Classifies the stock as undervalued, fairly valued, or overvalued based on current price relative to intrinsic value and Buffet’s Limit.

Dividend-to-ROE Ratio: Offers insight into dividend payout sustainability relative to the company’s return on equity.

Instructions

Fallback Data Handling:
If any financial data is unavailable, fallback values are automatically used to ensure that key calculations remain meaningful and uninterrupted.

Intrinsics & Risk Assessment:

Intrinsic Value: Computed using book value and EPS to understand the stock’s core worth.
Buffet’s Limit: Adjusted from the intrinsic value based on the debt-to-equity ratio. The resulting margin of safety helps gauge the current price’s risk level.
Debt Warning:

Debt-to-Equity Ratio > 2: Triggers a red warning, advising caution due to potentially excessive debt.



Visual Indicators:

Intrinsically Undervalued (Green Area): When price is below intrinsic value, a green shaded area suggests the stock may be undervalued, potentially presenting a buying opportunity.

Debt vs. Equity (Area Plots):
Red Area: Represents debt. A larger red area signals relatively high debt levels.
Green Area: Represents equity. A larger green area suggests stronger financial health.

Revenue & Net Income (Histograms):
Green Bars: Positive or improving fundamentals.
Red Bars: Negative or declining performance.
Investment Status:

Undervalued (Green): Price below intrinsic value.
Fairly Valued (Yellow): Price between intrinsic value and Buffet’s Limit.
Overvalued (Red): Price above intrinsic value, implying increased downside risk.

Table Display:
A convenient table summarizes key metrics at a glance, including P/E ratio, Debt-to-Equity ratio, intrinsic value, margin of safety, net income, total revenue, and the Dividend-to-ROE Ratio.

Dividend-to-ROE Ratio:
This metric provides additional context on the company’s dividend policy relative to its return on equity, aiding in evaluating dividend sustainability.

Disclaimer

Important Disclaimer:
The DCA Fundamentals 1.0 indicator is provided solely for educational and informational purposes. It is not investment advice, a recommendation, or an endorsement of any security or strategy. All calculations are based on data provided by third parties, and their accuracy or completeness is not guaranteed.

Investing and trading involve significant risks. You may lose more than your initial investment. Historical performance or indicators cannot guarantee future results. Before making any investment decisions, you should conduct thorough research, consider consulting a qualified financial professional, and implement robust risk management strategies.

By using DCA Fundamentals 1.0, you acknowledge these risks and agree that neither the creator nor any affiliated parties are responsible for any losses incurred. Use this tool at your own discretion and risk.