The Snowflake is a visual summary of the 30 checks from our company analysis and gives you an instant understanding of company’s investment profile, helping you quickly decide if it is worth researching any further.
How to read the Snowflake?
The colors of the Snowflakes are simply a representation of how many checks they passed on the analysis. The more checks that are passed, the larger the surface area of the snowflake, and the more green it becomes. We do 30 different pass/fail checks in 5 core areas of a company - Value, Future, Past, Health, Dividends.
While it's colour changes from red to green depending on how many checks the company passed, a low score in a particular assessment criteria should not necessarily exclude a stock from investment consideration.
Let's look at an example:
This snowflake suggests this company is a great dividend payer in an excellent financial condition, with moderate value and growth potential.
Note: the Snowflake is not a buy or sell recommendation. It is a way for you to get a quick snapshot of a company.
For example, a low "Dividend" score simply indicates that from an Dividend point of view, the company may be paying a low dividend, however it may also be experiencing high growth and reinvesting cash in growth initiatives.
More Snowflake examples
High Growth Company
Great growth prospects along with an excellent financial condition. Not undervalued or paying any dividend.
Undervalued based on the current level of earnings but very high level of debt and no dividend or future growth prospects.
For those interested a detailed breakdown of all the analysis we do (ie the Snowflake and additional points), the entire analysis model can be seen here.