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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
RLI has an G-score of 2.
The historical rank and industry rank for RLI's Mohanram G-Score or its related term are showing as below:
During the past 13 years, the highest Piotroski G-score of RLI was 6. The lowest was 2. And the median was 4.
The historical data trend for RLI'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.
RLI Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Mohanram G-Score | Get a 7-Day Free Trial | 4.00 | 4.00 | 3.00 | 2.00 | 3.00 |
RLI Quarterly Data | ||||||||||||||||||||
Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | |
Mohanram G-Score | Get a 7-Day Free Trial | 2.00 | 3.00 | 3.00 | 3.00 | 2.00 |
For the Insurance - Property & Casualty subindustry, RLI'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.
For the Insurance industry and Financial Services sector, RLI's Mohanram G-Score distribution charts can be found below:
* The bar in red indicates where RLI's Mohanram G-Score falls into.
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.
Question 2. Cash ROA
Cash ROA equals to Cash Flow from Operations divided by average Total Assets. It measures how well a company uses its asset to generate cash.
Score 1 if Cash ROA > Cash ROA Industry Median, 0 otherwise.
Question 3. CFO and Net Income
Score 1 if CFO > Net Income, 0 otherwise.
Earnings Predictability
Question 4. Earnings Variability
Earnings Variability is measured as the variance of a firm's ROA in the past five years.
Score 1 if Earnings Variability < Earnings Variability Industry Median, 0 otherwise.
Question 5. Sales Growth Variability
Sales Growth Variability is measured as the 5-year variance in sales growth.
Score 1 if Sales Growth Variability < Sales Growth Variability Industry Median, 0 otherwise.
Accounting Conservatism
Question 6. Research & Development Intensity
Research & Development Intensity is calcualted by Research & Development divided by the beginning Total Assets.
Score 1 if Research & Development Intensity > Research & Development Intensity Industry Median, 0 otherwise.
Question 7. CAPEX Intensity
CAPEX Intensity is calcualted by Capital Expenditure divided by the beginning Total Assets.
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
RLI has an G-score of 2.
RLI (NYSE:RLI) Mohanram G-Score Explanation
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.
Thank you for viewing the detailed overview of RLI's Mohanram G-Score provided by GuruFocus.com. Please click on the following links to see related term pages.
Michael J Stone | other: President RLI Insurance Compan | C/O RLI CORP, 9025 N. LINDBERGH DR., PEORIA IL 61615 |
Michael E Angelina | director | C/O ENDURANCE SERVICES LIMITED, 333 WESTCHESTER AVENUE, WHITE PLAINS NY 10471 |
Paul Bennett Medini | director | THE ACE BUILDING, 17 WOODHOURNE AVE, HAMILTON BERMUDA D0 HM 08 |
Susan S. Fleming | director | C/O VIRTUS INVESTMENT PARTNERS, INC., 100 PEARL STREET, HARTFORD CT 06103 |
Seth Anthony Davis | officer: Vice President, Controller | 9025 N. LINDBERGH DRIVE, PEORIA IL 61615 |
Debbie Sharell Roberts | director | 204 W. 59TH STREET, BURR RIDGE IL 60527 |
Kaj Ahlmann | director | 17945 ROSEWOOD STREET, STILWELL KS 66085 |
Aaron Paul Diefenthaler | officer: VP, CIO | 9025 N. LINDBERGH DRIVE, PEORIA IL 61615 |
Restrepo Robert P Jr | director | |
Calvin Jr Butler | director | 10 SOUTH DEARBORN STREET, 54TH FLOOR, CHICAGO IL 60603 |
Todd Wayne Bryant | officer: Vice President, Controller | 9025 N. LINDBERGH DRIVE, PEORIA IL 61615 |
Jennifer L Klobnak | other: Sr. VP, Operations - RLI Ins. | 9025 N LINDBERGH DRIVE, PEORIA IL 61615 |
James J. Scanlan | director | 6 TODMORDEN LANE, ROSE VALLEY PA 19086 |
Gerald I Lenrow | director | 4052 MANSION DR N.W., WASHINGTON DC 20007 |
Jonathan E Michael | director, officer: President | C/O RLI CORP, 9025 N. LINDBERGH DR., PEORIA IL 61615 |
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