This is our second edition of a regular feature. If you would like to see our list of the Top 10 Biggest DATA Score Changes for the First Quarter of 2023 for the S&P 500, 400, and 600, simply follow the embedded link. This series helps you to answer the questions: Which companies have become more deceptive in the past year? And which companies have become more truthful in the past year?
Recall that the primary output of Deception And Truth Analysis is our DATA Score. DATA Scores range between -100% and +100% with any negative score indicating a level of deceptiveness and any positive score indicating a level of truthfulness. The mean DATA Score from 2008 thru 2022 was 6.02% and the standard deviation was 13.88%. DATA Scores are roughly normally distributed and extreme scores are certainly more difficult to attain.
Referring to our stock market validation work, both deceptive and truthful DATA Scores are predictive of future stock price performance. Specifically, deceptive/negative DATA Scores are generally predictive of future stock price underperformance. While truthful/positive DATA Scores are generally predictive of future stock price overperformance.
Interpreting the tables below, the thoughtful investor should look at both the current DATA Score, as well as the change in DATA Score, year over year for a deeper understanding of the underlying behavioral dynamics at the companies list.
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