The “asset growth higher is better” signal aims to invest in the fastest-growing companies in total assets, thus gaining exposure to rapid growth companies.
Some investors want to include this signal as they see high growth as an indicator for the company’s future potential, and therefore future returns.
Asset Growth – Higher Is Better Signal
This signal ranks stock according to their total asset growth. This allows to identify and purchase stocks that are ranked with the highest asset growth and (if applicable) short-sell stocks that are ranked with the lowest asset growth.
Each day we calculate the asset growth by taking the company’s total assets (from the Balance Sheet) and dividing it by the previous year’s total assets (also from the Balance Sheet). If the denominator is zero or negative (very unlikely), then this signal is NULL.
Later stocks are ranked with a score of 10 to 0, with 10 having the highest asset growth to 0 having the lowest asset growth.
Data Scope & Range
Asset growth is calculated daily for over 6,000 stocks in the historical database.
TipRanks calculates asset growth from January 2011 to the present day.