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The total number of points for these key sub-categories makes up the rating for each category respectively, based on a scale that ranges from 0 to Catalyst Potential is a tool for our analyst to flag specific catalysts that may drive the share price. At Redeye, we use a discounted cash flow DCF model to discount future cash flows back to today at a rate that reflects the riskiness or uncertainty of those cash flows. The structural growth component can be driven by secular market trends, technological leadership, a superior business model or any type of durable competitive advantage. Even the greatest potential is of no benefit unless the balance sheet can cope with funding growth.

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In addition to our cash flow-based analysis we often use a comparables approach to make snapshot comparisons between similar companies within industries or to measure value versus sector or market averages.

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Just because prices are not attractive enough to buy is not a reason to sell. For many high-quality businesses, the calculation of this rate can be sensibly informed by their exposure to structural growth drivers, which, in turn, can justify higher growth rates than GDP. At Redeye, we use a discounted cash flow DCF model to discount future cash flows back to today at a rate that reflects the riskiness or uncertainty of those cash flows. The total number of points for these key sub-categories makes up the rating for each category respectively, based on a scale that ranges from 0 to Though, any worst-case scenario is often more consequential than the forecast itself. Companies need highly qualified management to execute a plan to create long-term shareholder value, even if it comes at the expense of short-term results.

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