Return on Investment Backtest

Return on Investment (ROI) is a fundamental measure of profitability and efficiency based on how much net income is generated by a company’s total debt and equity.  Return on Investment is calculated as follows: Return on Investment = Income After Taxes / (Total Long Term Debt + Stockholders Equity) This fundamental is defined in Portfolio123, the bactesting tool I’m using, as the trailing

Gross Profits to Assets Ratio Backtest

The Gross Profits to Assets ratio is another profitability measure. This fundamental was recently mentioned by Ken Faulkenberry in the comments section of my Return on Assets Backtest article. Ken was interested in seeing a backtest of this fundamental. Apparently, the gross profits to total assets ratio is starting to gain popularity among value investors. It was

Consumer Debt in the United States

Consumer debt is a big part of the economic reality of life in the United States. AS of June 2013, total consumer debt in the United States totaled $2.84 trillion. The average consumer household has $15,950 in consumer debt. There are three programs that consumers can utilize to deal with excessive personal debt.  These include the

Return on Assets Backtest

Return on Assets (ROA) is a fundamental measure of profitability based on how much net income is generated by a company’s assets.  Return on Assets is calculated as follows: Return on Assets = Net Income / Average Total Assets Return on Assets recently came up in a discussion regarding the Piotroski F-Score Backtest.  Return on assets

Piotroski Score Backtest Part 2

I received some feedback on my last post regarding the Piotroski F-Score backtest. The comment suggested that I run the backtest for each of the ten discrete Piotroski Scores. I have been using quintiles for my fundamental backtests, but I did agree that in the case of the Piotroski Score it might make more sense to

Piotroski F-Score Backtest

The Piotroski F-Score is an advanced compound fundamental analysis strategy developed by Joseph D. Piotroski. Piotroski detailed this strategy in his 2002 academic paper, “Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers.”  The F-Score gives stocks one point for passing each of the following simple accounting-based fundamental tests: Positive net income

New Fat Pitch Financials Logo

I just finished drawing a new logo for Fat Pitch Financials. I wanted it to be both baseball inspired and finance themed. I settled on using the shape of a baseball, the green colors of finance, and a money inspired font. At first blush, I am pretty happy with the outcome. The true test will be what

Business Podcasts I’m Listen to this Week

Over the past few months, I’ve started incorporating podcast listening into my morning commute. It’s often easier to listen to a podcast versus trying to read a book while taking a crowded train, and while driving, it is a good alternative to just listening to music. Improvements in Apple’s iTunes Podcast app have made downloading podcasts

Introducing the Fat Pitch Financials Value Investing Video Series

Fat Pitch Financials is launching a screencast video series.  This first episode provides a brief introduction to this value investing blog. Please submit feedback on the quality of this video.  I’d also love to hear your suggestions on topics for me to cover in upcoming segments.

Building Value in 2015

Happy New Year! I hope you all had a great time with friends and family over the holidays. While visiting family, I started thinking about my New Year’s resolution for 2015. Looking back over the past few years, I’ve been rather focused on looking for value. While that has been great, I want to pivot