Acadia Model Overview

The Acadia Model ranks and analyzes securities of the S&P 500 as well as any large universe of U.S. securities. The Model uses only fundamental data and can easily be run on a desktop or laptop.

• The Acadia Model
• Benefits to Equity Managers
• Integration with Current Software Products
• Input Data Used in Acadia Model
• Input Data Used in Acadia Model (continued)
• List of 14 Primary Variables Used in the Acadia Model to Rank a Universe of 500 Securities
• List of 13 Secondary Variables Used in the Acadia Model

The Acadia Model

The Model is based on relative value principles. It is so flexible that it can be used by managers with different fundamental philosophies to isolate companies based on specified criteria. The Model has two major screening attributes. The first screen ranks the universe using one or more variables. It has 14 primary screening variables. For example, the portfolio manager may decide to rank the S&P 500 universe using five of the 14 primary screening variables (see Attachment 2). He would give a specific weight to each of the five variables such as 0.10, 0.20, 0.20, 0.25 and 0.25 = 1.00 (all other variables would be given a weight of 0.00), before he hits "Run." At the conclusion of this screen, the universe is ranked 1-500 (1=highest multiple/ratio, 500=lowest multiple/ratio). The second screen requires companies to satisfy one or more additional criteria in order to remain on the ranking list. The Model has 13 secondary screening variables (see Attachment 3). For example, if the manager requires stocks within a certain beta range and also wants to exclude the bottom 10% of the 500 universe based on Size, Return on Investment, Return on Sales, Revenue Growth, etc., he could specify these characteristics either before or after the Model is run. All stocks not satisfying the specified characteristics would be removed from the ranking list. By specifying "loose" to "tight" secondary criteria, the manager can dramatically reduce his universe. This reduced universe would be used for further fundamental analysis.

The Model executes the stipulated primary and secondary criteria in a sequence. From a user’s standpoint, all of the instructions are executed within twenty seconds.