Valuation Metrics

Investment Styles

Aggressive Growth: Aggressive growth investors employ an extreme version of the growth style. This can be seen by their propensity to hold the stocks of companies that are growing their revenue and EPS extremely quickly, are in an early stage of their life cycle, or have minimal or no current earnings.
Broker Dealer: Broker-Dealers are usually trading facilitators rather than investors. Included in this group are sell side research firms with broker operations, NYSE and NASDAQ trading desk positions of investment banks, investment banking client desks that execute buyback programs on behalf of corporations, private client firms that essentially act as custodians for high net-worth individuals, and brokers that sell unit investment trusts or exchange traded products.
Core Growth: Core Growth managers typically invest in mid or large capitalization, blue chip companies that have historically performed near the top of their sector or the S&P 500 in terms of profitability, earnings growth, and revenue growth. These investors are often willing to pay premium P/E multiples for highly sustainable businesses, strong management and consistent growth over the long term.
Core Value: Core Value investors focus on buying companies at relatively low valuations on an absolute basis, in relation to the market or its peers, or in comparison to an individual stock's historical levels. These portfolios typically exhibit price–to–earnings, price–to–book and price–to–cash flow multiples below the S&P 500. In addition, secular revenue growth rates of the companies in these portfolios are frequently below market averages and their earnings tend to be more cyclical.
Deep Value: Deep Value investors employ a more extreme version of value investing that is characterized by holding the stocks of companies with extremely low valuation measures. Often these companies are particularly out of favor or in industries that are out of favor. Some investors in this category are known for agitating for changes such as new management, a merger, or the spinoff of a subsidiary.
Emerging Markets: These investors focus primarily on companies in the developing economies of Latin America, the Far East, Europe, and Africa.
GARP: GARP investors try and build their portfolios with two types of securities: 1.) Those that are trading at a discount to the market or their peers yet are expected to grow at higher than the market average or their peers; and 2.) Those whose forward P/E ratio is less than, equal to, or only slightly above the long-term projected growth of the company. Stated another common way, GARP investors will often say they are either looking at large cap stocks whose PEG ratio (forward P/E divided by five-year projected growth) is less than the S&P 500 or at any sized company whose PEG ratio is less than 1. This is a more conservative investment style in comparison to an outright growth-oriented strategy. In addition, dividend yield is generally not a concern of most GARP investors.
Growth
: Growth investors bridge the gap between the Aggressive Growth and Core Growth investment styles. They tend to be slightly more aggressive than Core Growth investors, willing to pay slightly higher multiples for stocks and trade at a slightly more active pace. In general, they are looking for companies growing at superior rates than the general marketplace, but are unwilling to pay the extremely high multiples associated with the hyper growth stocks.
Hedge Fund: Hedge Fund investors have the majority of their funds invested in some sort of market neutral strategy. Notably, the term 'hedge fund' is both a legal structure (as opposed to a mutual fund) and an investment style. Nearly every firm that uses a hedge fund or market neutral style is legally organized as a hedge fund (and thus only opens to accredited investors). Many are offshore funds that are unregistered, have no investment limitations, and are not subject to disclosure regulations. The common element is that any long position taken in a specific equity is offset by a short position in either a merger partner (risk arbitrage), an 'overvalued' member of the same sector (long/short paired trading), a convertible bond (convertible arbitrage), a futures contract (index arbitrage) or an option contract (volatility arbitrage). Because of the idiosyncratic nature of these investors, the fundamentals of their portfolios are not indicative of their investment styles. Refinitiv categorizes these portfolios based on its specific knowledge of their historical investment behavior.
Income Value: Income Value investors are similar to those in the Core Value category except they are as interested in the dividend yield as they are in the low valuation ratios of the stocks they purchase. As a result, Income Value portfolios typically exhibit above average current income and low P/E ratios.
Index: Index investors generally create portfolios that are designed to match the composition of one or more of the broad-based indices such as the S&P 500, the Russell 1000/2000/3000, the Wilshire 5000, or the NASDAQ 100. Therefore, the performance and risk of the portfolio mirrors a section of the broader market. Their investment decisions are driven solely by the makeup of the index that is tracked rather than by an evaluation of the company and its business prospects. As a result, Index firms are often referred to as Passive investors. Refinitiv categorizes these portfolios based on its specific knowledge of their historical investment behavior.
International: This style refers to those money managers investing the majority of their equity assets in stocks of companies domiciled outside of North America. In most cases, the North American portion of the portfolio is either too small or does not exist, precluding Refinitiv from determining an accurate investment style based on the fundamentals of these companies. For "Global" investors which have more significant North American holdings, a specific style may be given which will apply primarily to the North American portion of the portfolio.
Momentum: Momentum institutions invest in stocks whose price, earnings, or earnings estimates are advancing at a faster rate than the market or other stocks in the same sector. Momentum investors generally look for stocks experiencing upward earnings revisions or producing positive earnings surprises. Most of the investors in this category have relatively high portfolio turnover rates due to a short-term (often quarterly) focus, and therefore will liquidate positions at the slightest hint of a disappointment or deceleration in earnings. Refinitiv categorizes these portfolios based on its knowledge of their historical investment behavior.
Sector Specific: Sector Specific investors have the majority of their assets in a single major industry category. Many times, these investors are "forced" to own most if not all of the stocks in a given sector whether or not they are deemed appropriately valued. Since their portfolio exposure is linked to a single sector, their performance is usually measured against an index that is pertinent only to that industry. As such, tweaking the relative exposure to the companies that constitute a given sector will determine these firm's investment decisions.
Specialty: This category encompasses a range of styles that are not based on the fundamentals of the stocks in the portfolio relative to the overall market. Examples include investors that hold a particularly high concentration of a single stock or a very small set of stocks, or specialize in convertible securities. This category is also reserved for any institution or mutual fund that does not meet the criteria for any of the other investment styles. Refinitiv categorizes these portfolios based on its specific knowledge of their historical investment behavior.
VC/Private Equity: Venture Capital and Private Equity investors are usually owners of public companies only when they have participated in a round of financing prior to an IPO and subsequently retained ownership after the transition from a private company to a public company. Other investors often consider positions held by venture capitalists as an "overhang" on the stock of a publicly traded company since VCs will typically dispose of their holdings of public companies during the first few years following an IPO.
Yield: Yield investors typically focus on buying companies with indicated dividend yields that are comfortably above the S&P 500 average and that are perceived to be able to continue making or increasing dividend payments over time. Investors that fall into this category tend to focus on income and safety more than on capital appreciation, and many have a dividend yield "hurdle rate" below which they will be either unlikely to consider owning a particular stock or forced to pare back a current position.

Hedge Fund Styles

Arbitrage

Convertible Arbitrage: Hedge fund managers in this category construct long portfolios of corporate convertible securities, such as convertible bonds, convertible preferred stock, and warrants, and hedge the equity element of these positions by selling short some portion of the common stock into which the convertible securities may be converted.
Fixed Income Arbitrage: This trading style describes a wide variety of strategies involving fixed income securities. Hedge fund managers attempt to exploit relative mispricing between related sets of fixed income securities. The generic types of fixed income hedging trades include: yield curve arbitrage, corporate versus Treasury Swap yield spreads and cash versus futures.
Capital Structure Arbitrage: This strategy exploits the pricing inefficiencies that exist in the capital structure of the same issuer. An example is going long on a high yield bond and shorting the stock of an issuer, to hedge the equity risk component of the high yield bond.
Statistical Arbitrage: This strategy profit from pricing inefficiencies identified through the use of mathematical models.

Event Driven

Merger/Risk Arbitrage: The strategy invests in event driven situations such as leveraged buyouts, mergers and hostile takeovers based on capturing the benefits driven by an announced, but not yet consummated, transaction. For example: taking a long position in the stock of a company being acquired in a merger, leveraged buyout or hostile takeover and simultaneously taking a short position in the stock in the acquiring company.
Distressed Securities: Buying and occasionally shorting securities of companies where the security's price has been, or is expected to be, affected by a distressed situation. This may involve reorganizations, bankruptcies, distressed sales and other corporate restructurings.

Equity

Long / Short: This strategy seeks to achieve absolute capital appreciation by investing in equity securities. The risk associated with long investment positions is reduced by taking short positions in securities that are thought to be overvalued.
Long Bias: This strategy is similar to a mutual fund, except the manager can trade a variety of financial instruments and use leverage.
Short Bias: In this strategy a manager consistently maintains a net short exposure to the market.
Market Neutral: Invests in long and short equity positions. Neutrality can be established in terms of dollar exposure, beta exposure, exposure to sectors, industries, market capitalization, interest rate sensitivity, and other risk factors.

Global

Macro: This strategy employs an opportunistic approach attempting to capitalize on global macroeconomic trends across markets and sectors. This approach is primarily based on economic analysis and forecasts of shifts in interest rates, currencies, equities and commodities, as well as monetary and other public policy developments.
Emerging Markets: Emerging market hedge funds focus on equity or fixed income investing in emerging markets as opposed to developed markets. Emerging markets investors generally have a strong long bias.

CTA/Managed Futures

CTA/Managed Futures: Generally, trade commodity futures, financial futures, options and foreign exchange and most are sometimes highly leveraged. Traditional CTAs or trend followers attempt to capture a term trend across a range of markets.

MultiStrategy

MultiStrategy: Investment approach is diversified by employing various strategies simultaneously to realize short and long-term gains.

Fund of Funds

Fund of Funds: A hedge fund which invests in other hedge funds. Funds of funds can invest in multiple managers of a single strategy or multiple strategies.

Orientations

Active: Active managers use fundamental research as the basis for investment decisions and typically meet with company management.
Passive: Passive managers employ indexing and/or quantitative strategies as the sole basis for stock selection. These investors typically do not meet with company management.

Filing Types

13D: This Schedule discloses beneficial ownership of certain registered equity securities. Any person or group of persons who acquire a beneficial ownership of more than 5% of a class of registered equity securities of certain issuers must file a Schedule 13D reporting such acquisition together with certain other information within ten days after such acquisition. Moreover, any material changes in the facts set forth in the Schedule generally precipitates a duty to promptly file an amendment on Schedule 13D.
13G: Schedule 13G is a much abbreviated version of Schedule 13D that is only available for use by a limited category of "persons" (such as banks, broker/dealers, and insurance companies) and even then only when the securities were acquired in the ordinary course of business and not with the purpose or effect of changing or influencing the control of the issuer.

Institution Portfolios

Ownership sources included in this filing type are: 13F, Aggregates, and Shareholder Report.

Form 13F: Quarterly report of equity holdings filed with the SEC by institutional investment managers having equity assets under management of $100 million or more. Included in this category are certain banks, insurance companies, investment advisors, investment companies, foundations and pension funds. Non U.S. institutional investment managers are required to file a Form 13F if they use any means or instrumentality of United States interstate commerce in the course of their business; and (2) exercise investment discretion over $100 million or more in Section 13(f) securities.
Aggregate: Institutional position derived from cumulative mutual fund holdings. An Aggregate position may represent only a portion of total shares held and while not a regulatory filing per se, is formulated based on filing data.
Shareholder Reports: Complete portfolio holdings supplied directly to Thomson Financial or obtained through other means, e.g. investor website or annual report.

Other Declarable Stakes

Ownership sources included in this filing type are Substantials, Early Warning Reports, Alternative Monthly Statements, 10K, and 20F.

Substantials: Ownership data on non U.S.traded obtained on through a number of sources including, but not limited to, the media and official company-issued statements.
Early Warning Reports: An initial declarable stakes report required when an investor acquires 10% or more of a class of securities (within 2 business days of the transaction). An update is required when the percentage held increases or decreases by 2% or more, or when the percentage held falls below the 10% reporting threshold (again, within 2 business days).
Alternative Monthly Reports: Essentially the same declarable stakes report as the Early Warning, except that the type of investors who are allowed to use this filing is limited to "eligible institutional investors" (investment managers, mutual funds, pension funds, etc). An initial report is required within 10 days after the end of the month in which an investor acquires 10% or more of a class of securities. An update is required within 10 days after the end of the month in which the percentage held increases or decreases by 2.5%, or when the percentage held falls below the 10% reporting threshold.
The difference between those two types of filings in Canada is roughly similar to the difference between 13Ds and 13Gs in the US. The Alternative Monthly Report (13G) is am abbreviated version of the Early Warning Report (13D) that only certain filers are allowed to use.
10K
: Ownership positions obtained from company annual reports filed with the SEC.
20F
: Ownership positions obtained from foreign private issuer annual or transition report filed with the SEC.

Proxy: Ownership positions listed on a U.S. company’s annual proxy statement that lists holdings of owners over 10% as well as shares held by directors, officers, and some board members.
Proxy-CA: Ownership positions listed on a Canadian company’s annual proxy statement that lists holdings of shareholders.
Insider update: Position calculated using Form 4 holdings that have a more recent date than the proxy (13f, 13D/G) position.
Japanese 5% Shareholders: Any individuals or institutions that hold more than 5% of the total shares outstanding of Japanese listed companies. These holders have to report to local financial bureaus that are under control of the Ministry of Finance within 5 business days. If there is 1% or more of an increase/decrease in shares held after the submission, they must submit a subsequent report within 5 business days from the date of the change.
Registers: Shareholder positions in U.K.listed companies supplied to the company registrar by the registered owner. Disclosure is made in compliance with the UK Companies Act, an Act of the UK Parliament and this data is available to the public, including Thomson Financial to purchase or view. Included in this filing type are S212 and S213 filings.
RNS: Investor purchases, sales, and holdings changes resulting from mergers, takeovers, or buybacks of U.K. listed companies and announced on the Regulatory News Service (RNS), the London Stock Exchange’s official news outlet.

Insider Filings

SEC Forms 3, 4, 5, and 144 as well as RNS filings by Directors

Form 3: Initial Statement of Ownership. Form 3 is filed only once by an insider, for each company that he or she is affiliated with, and is usually filed within ten (10) days of the company going public, and/or within 10 days of an insider being appointed an executive officer or director.
Form 4: Statement of Changes in Beneficial Ownership. Form 4 is required any time there is an open market purchase, sale, or an exercise of options. It must be filed by the 10th of the month following the transaction and contains the details of all nonexempt transactions that exceed $10,000 during that month.
Form 5: Annual Statement of Changes in Beneficial Ownership. This form is required to be filed annually for those insiders who have had exempt transactions and had not reported them previously on a Form 4. It must be filed within 45 days after the close of the issuer's fiscal year.
Form 144: Intention To Sell Restricted Securities. This form must be filed as notice of the proposed sale of restricted securities or securities held by an affiliate of the issuer in reliance on Rule 144 when the amount to be sold during any threemonth period exceeds 500 shares or units or has an aggregate sales price in excess of $10,000.
RNS: Director purchases, sales, and holdings changes resulting from mergers, takeovers, or buybacks of U.K. listed companies and announced on the Regulatory News Service (RNS), the London Stock Exchange’s official news outlet.

Ownership Form

Indication by filer on Forms 3, 4, and 5 whether ownership is direct or indirect.

Direct Holdings: Shares that are held in the name of the insider.
Indirect Holdings: Shares that are controlled by the insider, yet are held by another entity such as a family member, a trust, a company plan, or even a corporation to which the insider is affiliated. In many cases, the same block of indirect stock may be claimed by several insiders, such as a group of trustees over the same trust, or several partners in the same partnership.

Funds: Mutual funds, hedge fund portfolios, unit trusts, investment trusts, variable annuities, and other portfolios organized for retail and/or institutional investors and run by a professional money manager.

Investor Types

Investment Managers: buyside institutions that have discretionary power over assets under management (AUM) and make buy/sell decisions.
Bank and Trust: These firms perform all of the functions of a retail bank. As a retail bank, a portfolio of investments are put together by an investment adviser and sold in units to investors by brokers. They may also handle Trust Accounts, which are outside companies or individuals that have a bank manage their money for their own pensions or for various other reasons. They invest the money their customers hold in their accounts in order to make interest payments and their own profits.
Endowment Fund: Endowment Funds are permanent gifts, often to universities or colleges,which are reinvested to ensure continuing profit.
Finance Company: Companies which engage in making loans to individuals or businesses. Unlike a bank, they do not receive deposits but rather obtain their financing from banks, institutions and various other financial related sources.
Foundation: These are philanthropic organizations that are dedicated to specific missions such as strengthening democratic values, reducing poverty and injustice, promoting international cooperation and advancing human achievement. In addition, they usually make grants to organizations in order to further these missions. Examples: Amelia Peabody Foundation; Adolph & Esther Gottlieb Foundation; and The Ford Foundation.
Government Agency: These are investment arms run on behalf of a governmental agency. Examples: City of Tampa; Abu Dhabi Investment Authority; Federal Reserve Board of Governors and Ohio Bureau of Worker's Compensation.
Hedge Fund: A hedge fund management firm who, through its hedge fund products, is permitted to use aggressive strategies that are unavailable to mutual funds, including selling short, leverage, program trading, swaps, arbitrage and derivatives. Many times they are highly secretive because they use risky investment styles and also involve high net investors. Since they are restricted by law to less than 100 investors, the minimum investment is typically $1 million.
Investment Advisor: Investment advisors registered with the Securities and Exchange Commission who manage assets for private clients and institutions.
Insurance Company: Insurance Companies invest in a similar fashion as Investment Advisors. They reinvest the money they take in in order to make coverage payouts as well as their own profits.
Pension Fund: A qualified retirement plan set up by a corporation, labor union, government, or other organization for its employees. In order to be included in the TF database, the pension fund must manage a portion of its assets internally.
Private Equity: Firm that invests solely in private equity investments (i.e. privately held companies). They provide equity financing to small and middle market companies engaged in a variety of industries. They often focus on management buyouts, industry consolidations, recapitalization of existing business and other private equity opportunities.
Venture Capital: A firm that specializes in providing money to startup firms and small businesses with exceptional growth potential.
Investment Advisor/Hedge Fund: An investment firm that uses both “traditional” and hedge fund (i.e. "alternative") investment techniques.
Brokerage Firms: A sell side investment firm which acts as an intermediary between a buyer and seller usually charging a commission. Brokerage firms in the TF database are typically those which service the institutional investment community. Some sell side firms have ownership attached to them as a result of a 13F filing.
Research Firm: Sell side research firm that also has an investment banking side.
Independent Research Firm: A firm that writes research intended for the buyside community. The firm does not have an underwriting business or investment banking business. The firm does not have a proprietary trading operation. These firms typically charge for their individual research reports.
Strategic Entities: Entities (Corporations, Holding Companies and Individuals) that don't invest for 'investment management' purposes, but rather invest for strategic stakes in companies. They may also be a officer or director in the company.
Corporation: Typically a business organization that is given many legal rights as an entity separate from its owners. For Ownership purposes, these entities will typically be set up to represent its strategic investments.
Holding Company: A company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors, therefore being able to control its policies and management. Examples: Icahn Holding Corporation and Banc One Corporation.
Individual Investor: Individual wealthy investors or officers and directors.

Institution sub types

This grouping consists of all “portfolio” types. These are not investment firms. They are the funds that the investors manage.

Mutual Fund: An investment vehicle operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives.
Hedge Fund Portfolio: These records represent the individual hedge funds that are managed by Hedge Fund management firms.

Valuation Metrics Support

Glossaries / Definitions