Mohanram G-Score is a financial indicator developed by professor Partha Mohanram to help investors find the best investment opportunities in the growth stocks. Companies have higher G-score tends to generate higher return. According to his study, the best growth stocks that have a G-Score greater than 6 tend to beat the market, while those with a G-Score lower than 1 tend to have negative absolute returns.
Thus, the zones of discrimination were as such:
Good or high score = 6, 7, 8
Bad or low score = 0, 1
Raia Drogasil has an G-score of 7. It is a good or high score, which tends to beat the market.
The historical rank and industry rank for Raia Drogasil's Mohanram G-Score or its related term are showing as below:
BSP:RADL3'
s Mohanram G-Score Range Over the Past 10 Years
Min: 0 Med: 4 Max: 7
Current: 7
During the past 13 years, the highest Piotroski G-score of Raia Drogasil was 7. The lowest was 0. And the median was 4.
Raia Drogasil Mohanram G-Score Historical Data
The historical data trend for Raia Drogasil's Mohanram G-Score can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Raia Drogasil's Mohanram G-Score
For the Pharmaceutical Retailers subindustry, Raia Drogasil's Mohanram G-Score, along with its competitors' market caps and Mohanram G-Score data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Raia Drogasil's Mohanram G-Score Distribution in the Healthcare Providers & Services Industry
For the Healthcare Providers & Services industry and Healthcare sector, Raia Drogasil's Mohanram G-Score distribution charts can be found below:
* The bar in red indicates where Raia Drogasil's Mohanram G-Score falls into.
Raia Drogasil Mohanram G-Score Calculation
The calculation of the Mohanram G-score consists of eight criteria. Assign one point for each criterion met, then add up all the points to get the G-Score.
Profitability
Question 1. Return on Assets (ROA)
ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. It measures how well a company uses its asset to generate earnings.
Score 1 if ROA > ROA Industry Median, 0 otherwise.
Score 1 if CAPEX Intensity > CAPEX Intensity Industry Median, 0 otherwise.
Question 8. Advertising Expenditure Intensity
Advertising Expenditure Intensity is calcualted by Advertising Expenditure divided by the beginning Total Assets. Note that Advertising Expenditure is not reported as a seperate line item for many companies, thus Selling, General, & Admin. Expense is used in this calculation.
Score 1 if Advertising Expenditure Intensity > Advertising Expenditure Intensity Industry Median, 0 otherwise.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
* Note that all the Industry Median used for comparison in his original research, are substituted with Sector Median due to the limitation of data within certain countries.
Good or high score = 6, 7, 8
Bad or low score = 0, 1
Raia Drogasil has an G-score of 7. It is a good or high score, which tends to beat the market.
Partha Mohanram is the John H. Watson Chair in Value Investing at Rotman and the Acting Vice-Dean of Research Strategy and Resources.
In 2000, he wrote a research paper called "Separating Winners from Losers Among Low Book-to-Market Stocks Using Financial Statement Analysis".
This paper tests whether a strategy based on financial statement analysis of low book-to-market (growth) stocks is successful in differentiating between winners and losers in terms of future stock performance. Based on the research, a strategy based on buying high G-score (6, 7 or 8) firms and shorting low G-score (0 or 1) firms consistently earns significant excess returns. Further, the results do not support a risk based explanation for the book-to-market effect as the strategy returns positive returns in all years, and firms that ex-ante appear less risky have better future returns.
To conclude, one can use a modified fundamental analysis strategy (G-score) to identify mispricing and earn substantial abnormal returns.
Raia Drogasil Mohanram G-Score Related Terms
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Raia Drogasil SA is a large retail drug store operator in Brazil. The company's stores sell branded and generic medication, over-the-counter medicine, health and beauty aids, perfumery, cosmetics, household items, and personal care products. The company also acts as a pharmacy benefit manager, performing medical purchases with prenegotiated discounts. The majority of Raia Drogasil's revenue is generated through branded drug sales, while the bulk of the remaining revenue stems from perfumery, over-the-counter drugs, and generic drugs. The company owns a variety of stakes in operational subsidiaries.
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