Style Score (Value-Growth Score)

In order to graphically distribute the X and Y coordinates evenly across the width and height of the Style Box grid, Morningstar established a system of rescaling for stocks and funds.

Rescaling is for graphical presentation only. All in-house calculations (e.g. fund Style Box, Morningstar Category™) use raw scores.

Rescaling does not change the style assignment for a stock or fund.

The same rescaling rules can be used for stocks and funds.

Each raw value for style and size (raw X and Y) is rescaled onto a grid that runs from –100 to 400 (rescaled X and Y). For example, during one month, the raw Y scores for stocks ranged from –555 to 397 (the smallest numbers represent the micro-cap universe). These Y scores were squeezed and stretched and redistributed between –100 and 400.

The scores for a stock’s value and growth characteristics determine its horizontal placement. There are five value factors and five growth factors.

Value factors:

Forward Looking

            Price/Projected Earnings 50.0%

Historical-Based Measures

            Price/Book 12.5%

            Price/Sales 12.5%

            Price/Cash Flow 12.5%

            Dividend Yield 12.5%

Growth factors:

Forward Looking

Long-term Projected Earnings Growth 50.0%

Historical-Based Measures

Book Value Growth 12.5%

Sales Growth 12.5%

Cash Flow Growth 12.5%

Historical Earnings Growth 12.5%