ELM Co (SAU:7203) GF Value Rank : 0 (As of May. 28, 2024)

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What is ELM Co GF Value Rank?

ELM Co has the GF Value Rank of 0.

The GF Value Rank is determined by the price-to-GF-Value (P/GF Value) ratio, a proprietary metric calculated based on historical multiples along with an adjustment factor based on a company's past returns and growth and future estimates of the business' performance.

GuruFocus found that for valuation, we cannot simply give stocks a better GF Value rank simply because they have a lower P/GF Value ratio. Backtesting shows that over the long term, the two worst-performing groups are the most expensive group (with the highest P/GF Value ratio) and the least expensive group (with the lowest P/GF Value ratio).

We can understand why the most expensive group underperforms. We were initially puzzled by the underperformance of the least expensive group, but we realized there is a reason why some stocks are super cheap. If they look too undervalued, it is often because the businesses behind them are poor quality. The market realized this and gave them low valuations. In a way, the market is efficient.

After multiple backtesting analyses, we granted the stocks in third-cheapest percentile the highest GF Value rank, as they have performed the best over a full market cycle. Stock performance is actually not as sensitive to valuation as it is to growth and profitability. On average, the companies in the 20%-50% valuation groups have similar performances. Therefore, we should avoid the most expensive and the least expensive stocks. We can be more tolerant of valuation.

Please click GF Score to see more details on the GF Score's 5 Key Aspects of Analysis.

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ELM Co (SAU:7203) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » ELM Co (SAU:7203) » Definitions » GF Value Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

Al Thaghr, Al Nakheel Dis Digital City, 6614, Unit No 2, Riyadh, SAU, 12382-4182

Website

https://www.elm.sa

ELM Co is engaged in providing ready-made and customized digital solutions in many areas. Its ready-made solutions serve a broad segment of customers, who can subscribe to different packages of their choosing to meet their needs and suffice business requirements. The services offered by the company include Consulting, Data Analysis, and Technical solutions. The segments are Digital Business, Business Process Outsourcing, and Professional Services, out of which the majority are from the Digital Business segment.

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