Financial Science and Art’s methodology, as the name implies, is both a science and and art. Our methodology applies math and statistics to established economic principles such as competitive life cycle, growth limits, return on capital limits and cash flow valuations. That’s the science. All of our reports and recommendation are supported by our methodology, we all speak the same language and we all understand mathematical principles of economics.

However, forecasting is an art. While our analysts adhere to our methodology, there is some degree of freedom to adjust the forecast. For instance, an analyst can apply a more/less aggressive fade depending on the nature of the company and the industry they operate in.

The analysts have a number of levers they can pull to adjust the forecast if they can make a cogent argument to do so. In the end, what really matters is performance and we have a decade of out performance that provides a proven methodology.

 


Our Milestones

2001

FSA Financial Science and Art ltd was incorporated as a company.


2002

Launched First Version of QuickVALUATION

The dotcom boom and bust had left many investors empty handed but there was opportunity for entrepreneurs who could find ways to take advantage of the new online medium. FSA was able to build its first commercial version of QuickVALUATION thanks to the internet medium. The early versions of QuickVALUATION seem rudimentary by today’s standards but at the time was a leading edge solution and laid the foundation for a more sophisticated versions we use today.


2003

Launched Haywood RoC Report
Launched U.S. RoC Report

Many of FSA clients and potential clients agreed with our methodology in theory but challenged us to prove ourselves empirically so we began tracking model portfolios and recommendations. While we expected to beat the indices our results have proven to be beyond our expectations. In Canada we have beat the S&P Canadian indices 9 years in a row. In the U.S. we have beaten 9 of 9 S&P Sub-Sector Indices we track.


2004

Added Analysts to RoC report

Due to the success of our model portfolios clients wanted more. We revised the RoC report to include a much bigger universe of 200 + companies and include human intelligence whereby analysts add additional insight by commenting on news, guidance and forecasts. The results was a much richer and more complete view of the market.


2006

Launched Major Upgrade with Morningstar Data

As part of our continuous improvement we made a significant investment in technology and partnered with Morningstar Inc. to provide more robust and richer data. Our methodology did not change but our technology service offer became significantly better.


2009

Globe and Mail Screening with FSA

The Globe and Mail, Canada’s largest newspaper heard about our RoC Reports and regularly featured FSA for some stock investment screening ideas.


2010

Launched with Investor Scorecard with TMX/Equicom

TMX/Equicom and Toronto Stock Exchange company was looking for a partner for an Investor Scorecard concept they had. FSA won the bid and began producing investor scorecards that are posted on the TMX Money website.


2012

Launched QuickSCREEN

FSA made another significant technology investment and added QuickSCREEN to the QuickFINANCIAL suite. QuickSCREEN is a modern interface and contains all of our proprietary metrics and traditional metrics for the past 20 years, making it one of the richest screening and research tools in the marketplace today.


Company History

In 2001, with the launch of its QuickVALUATION research tool, FSA was founded by Matt Kacur, an expert in Value Based Management. Through his professional experience as a management consultant and stock research analyst, it became evident that there was great need for investment tools that were focused on cash flow instead of earnings. Traditionally, Wall Street and Bay Street research has been primarily focused on earnings and P/E multiples, despite overwhelming evidence that CASH FLOW and RETURN ON CAPITAL metrics are more highly correlated with true economic performance and stock market valuation, due to earnings complications such as accounting distortions and management’s choices in reporting. FSA was thus founded on the belief that the necessary accounting adjustments would result in far superior metrics and stock valuation tools than existed at the time. Our research and nine+ years of results have shown that our proprietary metric Cash Flow Internal Rate of Return (CFIRR) is a more accurate indicator of true economic performance than earnings, and that our valuation tools provide valuable insights into investing.

The QuickFINANCIAL Suite

Since 2001, FSA has licensed its flagship product, QuickVALUATION, to institutional money managers, providing a comprehensive database containing FSA’s proprietary metrics and valuation methodology on any stock trading in Canada and the US. In 2010, the launch of QuickSCREEN and QuickPORTFOLIO will complete the QuickFINANCIAL Suite and give FSA users much more power at their fingertips. With the client’s new ability to screen and follow their own ideas, FSA clients will be fully empowered by the Suite of tools; in the world of investing, empowerment is key. This interactivity will be augmented by the FSA Team’s investment ideas. Since 2001, FSA has made customer service its focus, keeping fresh stock trading ideas in front of clients through monthly reports and ongoing communication, including face to face monthly meetings.

The founding principles of FSA Financial Science and Art Ltd. are based on CASH FLOW, CASH METRICS, and DISCOUNTED CASH FLOW VALUATION, not EARNINGS and P/E Multiples!