We only look at when the stock is objectively "undervalued". I'm not saying the system will tell you that a stock like Palantir is undervalued because it has a bright future. No. This system only tells when a stock is objectively undervalued. There are a few ways to know this.
Here some examples:
- Market cap is less than book value.
- Market cap is less than free cash flow x 8
There are other ways, but these are some examples. Being undervalued doesn't mean its a good company, the trick is knowing why its undervalued and if that valuation is justified.