Hi guys,
I thought about this in the last few days. When I compare two companies of the same sector, I look at their balance sheet and I do the pros and cons, it takes quite some time honeslty. There's a lot of ratios, and to see if the difference is significiant or not is a pain. Can I just use the credit rating of Standard & Poors has a proxy to assess the financial position of a company? If I look at two companies of the same sector, one is rated BBB+, the other one is only BB, I can apply a premium to the BBB+ company. Standard & Poors is probably a much deeper financial analysis than I do.
Thoughst?
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