|A measure of performance based on the excess return of an investment relative to the return of a benchmark index.
|Percentage of how much a portfolio differs from its benchmark index, with 0% indicating no difference and 100% indicating no common holdings.
|Ability to cover debt obligations with assets.
|1/100th of 1%.
|Measure of a security or portfolio's volatility compared to the broad market's volatility.
|Book to Market
|Common shareholders' equity divided by market capitalization.
|Assets minus liabilities. Also known as shareholders’ equity.
|A debt security that can be repaid by the issuer prior to maturity.
|Capital Adequacy Ratio
|Capital divided by risk-weighted assets.
|Capital Expenditure (Capex)
|Purchase or upgrade of physical assets such as property, plant, and equipment.
|Amount of cash generated minus the amount of cash used by a company in a given period.
|Cash Pay Bond
|Debt securities which make interest payments in cash.
|Statistical measure of how two securities move in relation to each other.
|Annual interest rate on a debt security as a percentage of face value.
|Likelihood of loss due to a borrower defaulting on a loan.
|Dividend Payout Ratio
|Amount of dividends paid to shareholders relative to net income.
|Percentage change in the value of a security or portfolio from a peak to a subsequent trough.
|Treasuries or other debt securities that can be liquidated on short notice.
|Dividends per share divided by price per share.
|Weighted maturity of a fixed-income investment’s cash flows, used in the estimation of the price sensitivity of fixed-income securities for a given change in interest rates.
|Earnings before interest, taxes, depreciation and amortization.
|Market capitalization plus debt, minority interest, and preferred shares, minus total cash and cash equivalents.
|Market capitalization plus debt, minority interest, and preferred shares, minus total cash and cash equivalents, divided by earnings before interest and taxes.
|Market capitalization plus debt, minority interest, and preferred shares, minus total cash and cash equivalents, divided by earnings before interest, taxes, depreciation, and amortization.
|Enterprise Value/Free Cash Flow
|Market capitalization plus debt, minority interest, and preferred shares, minus total cash and cash equivalents divided by total cash flow from operations less capital expenditures.
|Market capitalization plus debt, minority interest, and preferred shares, minus total cash and cash equivalents, divided by annual sales.
|Federal Funds Rate
|Amount of interest depository institutions charge to lend reserve funds overnight to other depository institutions.
|Floating Rate Note
|Debt instrument that pays a variable rate of interest.
|Consensus earnings estimates for a future period, usually the next 12 months or next fiscal year.
|Price per share divided by earnings per share expected over the next 12 months or next fiscal year.
|Free Cash Flow
|Total cash flow from operations less capital expenditures.
|Significant decrease in price of a financial instrument between market close and opening, or when there is little to no trading.
|Graham-and-Dodd Investment Approach
|Method described by Benjamin Graham and David Dodd in their 1934 book Security Analysis which seeks to identify securities that may be underpriced relative to their estimated intrinsic value.
|Legal contract between a bond issuer and bondholder.
|Earnings before interest and taxes during a given period divided by interest expense due in that period.
|Credit rating that indicates a debt instrument has a relatively low risk of default.
|London Interbank Offered Rate. A survey of what London banks expect to pay to borrow overnight from other London banks.
|Request from a broker to increase a margin account's balance when it falls below a required minimum.
|Margin of Safety
|Discount of a security’s market price to what the firm believes is the intrinsic value of that security.
|Number of common shares outstanding multiplied by market price per share.
|Net Asset Value
|Total assets minus liabilities, divided by the number of outstanding shares.
|Net Present Value
|Difference between present value of cash inflows and present value of cash outflows over a given period.
|Total cash minus total debt.
|Net Interest Income
|Difference between interest revenue and interest expense.
|Net Interest Margin
|Difference between interest revenue and interest expense as a percentage of income-generating assets.
|When a company trades for less than the value of current assets minus all liabilities.
|A group of large U.S. companies in the 1960s and '70s, characterized by high price/earnings and consistent earnings growth.
|Earnings adjusted to remove effects of one-time, unusual, or seasonal influences.
|Operating income divided by net sales.
|Spread between a fixed-income security rate and the risk-free rate of return, adjusted to take into account an embedded option.
|Amount a bond issuer promises to repay when the bond matures.
|Patent expirations for pharmaceutical companies which typically result in a drop in sales.
|Price per share divided by book value per share.
|Price per share divided by cash flow per share.
|Price per share divided by earnings per share.
|Price/Tangible Book Value
|Price per share divided by tangible book value per share.
|Net income divided by revenue.
|Percentage of a security or portfolio’s results that was likely caused by the movements of a benchmark index.
|Return on Assets
|Net income divided by total assets.
|Return on Equity
|Net income divided by shareholder equity.
|Return on Invested Capital/Return on Capital
|Net income minus dividends paid, divided by total capital.
|The part of the financial industry involved with the creation, promotion, analysis and sale of securities.
|Portfolio return minus risk-free rate—such as that of the 10-year U.S. Treasury bond—divided by standard deviation of portfolio's excess returns.
|Price divided by real (inflation-adjusted) per-share earnings over a 10-year period
|A data set's dispersion from its mean.
|Tangible Book Value
|Book value minus intangible assets (e.g., goodwill).
|Book value minus intangible assets (e.g., goodwill) and preferred equity from the company's book value.
|Term Structure of Interest Rates
|A graph that plots yields offered by bonds of similar quality at different maturities.
|Debt securities selling at a discount to our estimates of their intrinsic value.
|VIX-CBOE Volatility Index
|Shows the market’s expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility is meant to be forward looking and is calculated from both calls and puts, and is a widely used measure of market risk, often referred to as the investor fear gauge. Source: investopedia.com
|Current assets minus current liabilities; a measure of a company’s efficiency and short-term financial health.
|Reduction in the book value of an asset.
|Annual income from the investment (dividend, interest, etc.) divided by the current market price of the investment.
|Graphical comparison of the relationship between interest rates for loans of various maturities with similar credit quality.
|Difference in yield from a Treasury security and another debt security of similar maturity.
|Yield to Maturity
|Total return from a bond held until its expiration date.