DEFINITION of 'Timeliness'

Timeliness is a proprietary rating system used to rate stocks while taking into account earnings changes and price performance in order to assess potential price performance over the short term. Common market factors are not measured in this stock rating system. The rating of "A" is the highest rating, based on earnings and price performance, and a rating of "E" is the lowest. These ratings are updated daily. Although "A" and "B" stocks may yield higher returns compared to "C" and "D" stocks, these higher rated stocks tend to be much more volatile.

BREAKING DOWN 'Timeliness'

In comparison, the Value Line Investment Survey uses a slightly different rating method. A rating of one is the highest rating while a rating of five is the lowest rating, specifically for 1,700 stocks followed by Value Line, which accounts for about 90 percent market capitalization of stocks on the domestic exchanges. The ratings are relative to the other stocks being followed and based on the likely price performance of a stock over a six to 12-month period.

How the Timeliness Ratings Work

Factors that go into the Value Line timeliness rating system include the 10-year trend of relative earnings and prices, as well as recent earnings and price changes. Unexpected earnings results are also taken into consideration. A forecast of the price change for each stock is generated by a computer program by drawing up the various elements as they pertain to all the stocks being followed for up to 12 months.

  • Rank 1 represents the 100 stocks with the highest rating that are collectively are projected to exhibit optimal performance compared with the rest of the companies rated by Value Line.
  • Rank 2 consists of 300 that, as a group, are anticipated to show better-than-average relative price performance.
  • Rank 3 is made up of 900 stocks that are anticipated to exhibit average relative price performance.
  • Rank 4 consists of 300 stocks that are expected exhibit below average price performance.
  • Rank 5 represents the lowest 100 stocks that are forecast to show the poorest price performance compared with the other companies in the ratings system.

When using this method it important to consider the volatility of your investment. The rating can be affected by new earnings and changes in price movement. The general market conditions should also be understood by investors since this rating does not acknowledge it and the best stocks could be affected by adverse market periods.

RELATED TERMS
  1. Reference Rate

    A reference rate uses benchmarks, like the prime rate and the ...
  2. Bank Rate

    A bank rate is the interest rate at which a nation's central ...
  3. Outperform

    Outperform is an analyst recommendation that a stock is expected ...
  4. Interest Rate Cap Structure

    Interest rate cap structure refers to the provisions governing ...
  5. Interest Rate Risk

    Interest rate risk is the ever-present possibility that interest ...
  6. Interest Sensitive Assets

    Interest sensitive assets are assets held by a bank that are ...
Related Articles
  1. Insights

    The Impact of a Fed Interest Rate Hike

    The Federal Reserve recently raised benchmark interest rates. With so much attention on the Fed's policy, here's what happens when the Fed hikes rates.
  2. Financial Advisor

    Implications of the Federal Reserve's Impending Rate Hike

    The Federal Reserve begins its two-day meeting on Wednesday, September 16, and everyone is watching to see if the central bank will raise the United States target interest rate for the first ...
  3. Financial Advisor

    How Federal Reserve Activity Impacts Investment Portfolios

    The Federal Reserve's monetary policies impact investments in a number of ways.
  4. Trading

    4 Ways To Forecast Currency Changes

    Whether you are a business or a trader, forecasting currency exchanges helps guide your decisions to minimize risks and maximize returns.
  5. Retirement

    Protect Your Retirement Portfolio From Rising Interest Rates

    Rising interest rates have the potential to impact your retirement portfolio. Here's what helps.
  6. Investing

    How Interest Rates Affect Mutual Funds

    Find out how changing interest rates impact mutual funds, including bond and money market funds, and how higher rates can discourage investors.
  7. Insights

    How Fed Rate Increases Impact Investors

    Investors who understand the impact of rising interest rates can make more informed decisions.
  8. Retirement

    How Higher Interest Rates Impact Your 401(k)

    Here's how a rise in interest rates will likely impact results in your 401(k).
  9. Financial Advisor

    Which Economy Is Larger - The United States or China?

    China's economy may be larger than the U.S. economy, but it all depends on which exchange rate method you use to make the GDP comparisons.
Trading Center