Scope

The scope of the report includes:

• Earnings Projections: The report’s core content is net income or earnings projections by company. The projections
  are for 1 to 12 months forward. The forecasts and their revisions over time detail short-term business trends. The forecasts also the growth rates for 505 companies, 63 industries, 11 market sectors, and the S&P 500 index.
• Value Metrics: Earnings estimates are extended to construct key value metrics by company. Consolidated value
  metrics also compare the relative value of industry or sector level portfolios.
• Return Momentum: Return momentum is the relative strength of returns for a company or portfolio versus the
  returns for the S&P 500 Index. Return momentum is also known as benchmark relative strength (BRS).

Methodology

Saffron Capital aggregates and curates a large amount of corporate earnings (or net income) data. By aggregating the
company data, we provide practical insights into the relative value of different companies and portfolios. We also use
earnings, value and return momentum to signal which companies and sectors to overweight or underweight.

The earnings projections we present are generated using 3 methods:

• Corporate guidance and planning projections, which are made available to the public in the corporate filings and
  announcements of all companies in the index.
• Analyst surveys include the earnings projections of multiple analysts per company. The survey data we use is
  compiled by FactSet Research Systems.
• Internal projections use historical financial statement data by company plus internally developed forecast and
  learning models.

We hope you enjoy this report.