Metrics, or quantitative metrics, as defined on Investopedia, are parameters or measures of quantitative assessment used for measurement, comparison or to track performance or production, and analysts use metrics to compare the performance of different companies, despite the many variations between firms. In the first couple episodes, the term 'metrics', or quantitative metrics, have been referenced a few times with regard to finding new MicroCap stocks, especially when using stock screeners. So, in this episode of the Planet MicroCap Podcast, our host, Robert Kraft @BobbyKKraft, spoke with Fred Rockwell, Founder of Tarsier Capital Management and Host of the Micro Cap Investing Podcast, discuss quantitative metrics.
At first glance, quantitative metrics can be complicated to understand - having a little knowledge of accounting principles would definitely help. However, and as Fred would agree, it's not necessary and hopefully this episode of the podcast will help you realize its not as daunting as you may think. What's key that I think the episode accomplishes is understanding the importance of why we would screen for stocks using different quantitative metrics.
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In this episode, our host, Robert Kraft, and guest, Fred Rockwell, discuss the following topics:
- Fred's background
- How he got into investing in MicroCap stocks
- Defining what 'Quantitative Metrics' is
- Why its important to understand what the different 'Quantitative Metrics' mean when screening for MicroCaps
- Define the following metrics:
FCF Yield (Free Cash Flow Yield)
P/E (Price Earnings Ratio)
P/TBV (Price to Tangible Book Value)
Revenue and Income CAGR (Compound Annual Growth Rate)
- Take aways from this episode: how to approach understanding 'Quantitative Metrics'