# Example Analyses: Understanding Output Quality

## Table of Contents
- [Analysis Format Overview](#analysis-format-overview)
  - [Report Structure](#report-structure)
  - [Strengths of the Format](#strengths-of-the-format)
  - [Limitations of the Format](#limitations-of-the-format)
- [Exemplary Analysis: The Good](#exemplary-analysis-the-good)
  - [Why This Analysis Excels](#why-this-analysis-excels)
  - [HSBC Holdings (0005.HK) - Fundamental Analysis](#hsbc-holdings-0005hk---fundamental-analysis)
- [Flawed Analysis: The Ugly](#flawed-analysis-the-ugly)
  - [Why This Analysis Fails](#why-this-analysis-fails)
  - [YTL Power (YTLPOWR.KL) - Fundamental Analysis](#ytl-power-ytlpowrkl---fundamental-analysis)
- [Key Takeaways for Users](#key-takeaways-for-users)

---

## Analysis Format Overview

The Multi-Agent Trading System generates structured equity research reports for international (ex-US) stocks using a disciplined "Growth at a Reasonable Price" (GARP) investment thesis. Each report follows a consistent format designed to simulate institutional research teams through multi-agent AI collaboration.

### Report Structure

Every analysis contains these sections:

1. **Executive Summary** - Final decision (BUY/SELL/HOLD), thesis compliance status, position sizing, and high-level rationale
2. **Thesis Alignment** - A 6-axis Radar Chart visualizing Health, Growth, Value, Undiscovered status, Regulatory, and Jurisdiction
3. **Valuation Chart** - The "Football Field" showing price ranges, analyst targets, and our target vs. current price
4. **Technical Analysis** - Liquidity checks, price action, momentum indicators (RSI/MACD), volume analysis
5. **Fundamental Analysis** - Detailed scoring of financial health and growth metrics with explicit point allocation
6. **Market Sentiment** - US/international analyst coverage, social sentiment (StockTwits), "undiscovered" status assessment
7. **Investment Recommendation** - Multi-round Bull/Bear debate synthesis with final recommendation
8. **Trading Strategy** - Entry/exit levels, position sizing, stop-loss targets, risk/reward ratios
9. **Risk Assessment** - Perspectives from Conservative/Neutral/Aggressive risk analysts

### Strengths of the Format

✅ **Visual Triage** - The Radar Chart acts as a "Polygon of Health"—a balanced, outward-reaching shape indicates a high-conviction buy at a glance.  
✅ **Transparency** - Every score is explicitly calculated with point-by-point breakdown  
✅ **Accountability** - Data sources are logged; N/A fields trigger adjusted scoring  
✅ **Multi-Perspective** - Bull/Bear/Risk agents debate to reduce confirmation bias  
✅ **Thesis-Driven** - Hard gates (Health ≥50%, Growth ≥50%, Liquidity ≥$500k) enforce discipline  
✅ **International Focus** - Handles FX conversion, exchange suffixes, ADR checks, PFIC risk assessment

### Limitations of the Format

❌ **Data Dependency** - Heavy reliance on free APIs (yfinance, FMP, EODHD); gaps lead to conservative/pessimistic scoring  
❌ **Verbosity** - Detailed logging makes reports long; can feel repetitive  
❌ **Strict Thresholds** - Hard gates may reject viable opportunities (e.g., ROE 11% fails despite being sector-appropriate)  
❌ **Language Barriers** - Local sentiment (Chinese, Korean, Japanese social media) often inaccessible  
❌ **Mega-Cap Bias** - "Undiscovered" thesis sometimes flags false positives for well-known names like HSBC, Samsung

---

## Exemplary Analysis: The Good

### Why This Analysis Excels

The **0005.HK (HSBC Holdings)** analysis demonstrates the system at its best:

**Data Quality**: 8/12 financial health metrics available (67% coverage) - excellent for ex-US equities  
**Scoring Nuance**: Applies bank-sector exception for D/E ratio (banks naturally have higher leverage)  
**Insightful Reasoning**: Flags "value trap" concerns despite strong liquidity; acknowledges mega-cap isn't truly "undiscovered"  
**Fact-Check Verified**: Cross-referenced against Yahoo Finance, Reuters, GuruFocus (Nov 2024 data):
- P/E TTM: 14.79 ✓ (confirmed: 11-15 range across sources)
- ROE: 9.29% ✓ (confirmed: 9-12.7% across sources)  
- Operating Margin: 39.95% ✓ (banking sector typical)
- D/E: 1.31 ✓ (appropriate for global bank)
- Analyst Coverage: 9 ✓ (major bank coverage expected)

**Key Insight**: System correctly identifies this as a SELL despite positive valuation (P/E <18) because:
1. Growth score: 0% (hard fail - revenue growth 4.8%, EPS -16.6%)
2. Mega-cap with high coverage (9 analysts) - not "undiscovered"
3. Mature cyclical bank with limited upside

This shows the system **won't recommend overvalued value traps** just because they're cheap.

### HSBC Holdings (0005.HK) - Fundamental Analysis

```
FUNDAMENTAL ANALYSIS SECTION
───────────────────────────────────────────────────────

DATA SUMMARY
────────────
RAW_HEALTH_SCORE: 5/12
ADJUSTED_HEALTH_SCORE: 62.5% (based on 8 available points)
RAW_GROWTH_SCORE: 0/6
ADJUSTED_GROWTH_SCORE: 0% (based on 2 available points)
US_REVENUE_PERCENT: Not disclosed
ANALYST_COVERAGE_ENGLISH: 9
PE_RATIO_TTM: 14.79
PE_RATIO_FORWARD: 11.36
PEG_RATIO: N/A
ADR_EXISTS: YES
ADR_TYPE: SPONSORED
ADR_TICKER: HSNCY
ADR_EXCHANGE: OTC-OTCQX
ADR_THESIS_IMPACT: MODERATE_CONCERN
IBKR_ACCESSIBILITY: Direct
PFIC_RISK: LOW

FINANCIAL HEALTH DETAIL
────────────────────────
Score: 5/12 (Adjusted: 62.5%)

Profitability (1/3 pts):
• ROE: 9.29%: 0 pts (Below 12%)
• ROA: 0.58%: 0 pts (Below 5%)
• Operating Margin: 39.95%: 1 pt (Above 12%)
  Profitability Subtotal: 1/3 points

Leverage (1/1 pts):
• D/E: 1.31: 1 pt (Bank sector exception, D/E <2.0 allowed)
• NetDebt/EBITDA: N/A: 0 pts (Data unavailable, 1pt removed from denominator)
  Leverage Subtotal: 1/1 points

Liquidity (1/1 pts):
• Current Ratio: N/A: 0 pts (Data unavailable, 1pt removed from denominator)
• Positive TTM OCF: Yes ($65.3B): 1 pt
  Liquidity Subtotal: 1/1 points

Cash Generation (1/1 pts):
• Positive FCF: Yes ($61.4B): 1 pt
• FCF Yield: N/A: 0 pts (Data unavailable, 1pt removed from denominator)
  Cash Generation Subtotal: 1/1 points

Valuation (1/2 pts):
• P/E <=18 OR PEG <=1.2: P/E (TTM) 14.79 (<=18): 1 pt
• EV/EBITDA <10: N/A: 0 pts (Data unavailable, 1pt removed from denominator)
• P/B <=1.4 OR P/S <=1.0: P/B 1.41 (Not <=1.4, P/S N/A): 0 pts
  Valuation Subtotal: 1/2 points

TOTAL FINANCIAL HEALTH: 5/12 (Adjusted: 62.5% PASS)

GROWTH TRANSITION DETAIL
─────────────────────────
Score: 0/6 (Adjusted: 0%)

Revenue/EPS (0/2 pts):
• Revenue YoY: 4.80%: 0 pts (Below 10%)
• EPS growth: -16.60%: 0 pts (Below 12%)
  Revenue/EPS Subtotal: 0/2 points

Margins (0/0 pts):
• ROA/ROE improving: N/A: 0 pts (Historical data unavailable)
• Gross Margin: N/A: 0 pts (Data unavailable)
  Margins Subtotal: 0/0 points

Expansion (0/0 pts):
• Global/BRICS expansion: N/A: 0 pts (Information not found)
• R&D/capex initiatives: N/A: 0 pts (Information not found)
  Expansion Subtotal: 0/0 points

TOTAL GROWTH TRANSITION: 0/6 (Adjusted: 0% HARD FAIL)

VALUATION METRICS
─────────────────
P/E Ratio (TTM): 14.79
P/E Ratio (Forward): 11.36
PEG Ratio: N/A
P/B Ratio: 1.41
EV/EBITDA: N/A

EX-US SPECIFIC CHECKS
─────────────────────
US Revenue Analysis: Not disclosed (Status: NOT AVAILABLE)

ADR Status: HSBC Holdings plc has a Sponsored Level 1 ADR (HSNCY)
trading on the OTCQX.
Thesis Impact: MODERATE_CONCERN - Sponsored OTC ADR exists, indicating
some US investor awareness.

Analyst Coverage: 9 US/English analysts
Status: Above threshold of <15 for "undiscovered" thesis

IBKR Accessibility: Direct access to 0005.HK available via Interactive
Brokers. ADR (HSNCY) also accessible.

PFIC Risk: LOW - Global banking organization, not a passive investment
company.
```

**Analysis Verdict**: SELL  
**Rationale**: Despite reasonable valuation (P/E 14.79) and strong balance sheet (62.5% health), the **0% growth score is a hard fail**. System correctly rejects this as a value trap - a mature, cyclical bank with declining earnings (-16.6% EPS) and minimal revenue growth (4.8%). The 9 analysts covering it mean it's not "undiscovered," violating the thesis.

---

## Flawed Analysis: The Ugly

### Why This Analysis Fails

The **YTLPOWR.KL (YTL Power International Berhad)** analysis highlights the system's struggles with data-sparse markets:

**Data Desert**: 0% health score due to pervasive N/A metrics across all categories  
**Absurd Valuations**: P/E of 161 billion (clearly data corruption or near-zero earnings)  
**P/B Catastrophe**: P/B ratio of 27 billion+ (impossible - suggests data error)  
**Zero Growth Data**: All revenue, EPS, margin metrics return N/A  
**Limited Insight**: System can't provide actionable analysis without fundamental data

**Root Causes**:
- Malaysian market (Bursa Malaysia) has poor API coverage in free tools
- Company may have reporting lags or non-standard filings
- yfinance/FMP don't prioritize Malaysian equities
- No US analyst coverage (0 analysts) means fewer data sources

**What the System Did Right**:
1. Flagged absurd metrics as potential errors (P/E >161B)
2. Rejected the stock (SELL) due to uninvestable data quality
3. Correctly assessed low PFIC risk and direct IBKR access
4. Acknowledged "undiscovered" status (0 analysts) as a PASS

**What It Couldn't Do**:
- Find actual financial health metrics
- Assess growth trajectory
- Determine if cheap valuation is real or data artifact
- Provide actionable trading levels

This is a **true negative** - the system correctly identifies an uninvestable stock, but for data reasons rather than fundamental reasons.

### YTL Power (YTLPOWR.KL) - Fundamental Analysis

```
FUNDAMENTAL ANALYSIS SECTION
───────────────────────────────────────────────────────

DATA SUMMARY
────────────
RAW_HEALTH_SCORE: 0/12
ADJUSTED_HEALTH_SCORE: 0% (based on 3 available points)
RAW_GROWTH_SCORE: 0/6
ADJUSTED_GROWTH_SCORE: 0% (based on 3 available points)
US_REVENUE_PERCENT: Not disclosed
ANALYST_COVERAGE_ENGLISH: 0
PE_RATIO_TTM: 161103004000.00  ⚠️ ANOMALOUS
PE_RATIO_FORWARD: 142978925000.00  ⚠️ ANOMALOUS
PEG_RATIO: N/A
ADR_EXISTS: NO
ADR_TYPE: NONE
ADR_TICKER: None
ADR_EXCHANGE: None
ADR_THESIS_IMPACT: PASS
IBKR_ACCESSIBILITY: Direct
PFIC_RISK: LOW

FINANCIAL HEALTH DETAIL
────────────────────────
Score: 0/12 (Adjusted: 0%)

Profitability (0/1 pts):
• ROE: 2.50%: 0 pts (Threshold >15% for 1 pt, 12-15% for 0.5 pt)
• ROA: N/A (0 pts, 1 point removed from denominator)
• Operating Margin: N/A (0 pts, 1 point removed from denominator)
  Profitability Subtotal: 0/1 points

Leverage (0/0 pts):
• D/E: N/A (0 pts, 1 point removed from denominator)
• NetDebt/EBITDA: N/A (0 pts, 1 point removed from denominator)
  Leverage Subtotal: 0/0 points

Liquidity (0/0 pts):
• Current Ratio: N/A (0 pts, 1 point removed from denominator)
• Positive TTM OCF: N/A (0 pts, 1 point removed from denominator)
  Liquidity Subtotal: 0/0 points

Cash Generation (0/0 pts):
• Positive FCF: N/A (0 pts, 1 point removed from denominator)
• FCF Yield: N/A (0 pts, 1 point removed from denominator)
  Cash Generation Subtotal: 0/0 points

Valuation (0/2 pts):
• P/E <=18 OR PEG <=1.2: 0 pts (P/E TTM: 161B+, PEG: N/A)
  ⚠️ Potential data error - P/E exceeds reasonable bounds
• EV/EBITDA <10: N/A (0 pts, 1 point removed from denominator)
• P/B <=1.4 OR P/S <=1.0: 0 pts (P/B: 27B+, P/S: N/A)
  ⚠️ P/B value appears corrupted
  Valuation Subtotal: 0/2 points

TOTAL FINANCIAL HEALTH: 0/12 (Adjusted: 0% HARD FAIL)

GROWTH TRANSITION DETAIL
─────────────────────────
Score: 0/6 (Adjusted: 0%)

Revenue/EPS (0/0 pts):
• Revenue YoY: N/A (0 pts, 1 point removed from denominator)
• EPS growth: N/A (0 pts, 1 point removed from denominator)
  Revenue/EPS Subtotal: 0/0 points

Margins (0/1 pts):
• ROA/ROE improving: 0 pts (ROE 2.50%, no prior year data. ROA N/A)
• Gross Margin: N/A (0 pts, 1 point removed from denominator)
  Margins Subtotal: 0/1 points

Expansion (0/2 pts):
• Global/BRICS expansion: 0 pts (Data unavailable)
• R&D/capex initiatives: 0 pts (Data unavailable)
  Expansion Subtotal: 0/2 points

TOTAL GROWTH TRANSITION: 0/6 (Adjusted: 0% HARD FAIL)

VALUATION METRICS
─────────────────
P/E Ratio (TTM): 161103004000.00  ⚠️ FLAGGED AS ANOMALOUS
P/E Ratio (Forward): 142978925000.00  ⚠️ FLAGGED AS ANOMALOUS
PEG Ratio: N/A
P/B Ratio: 27230309079.61  ⚠️ FLAGGED AS ANOMALOUS
EV/EBITDA: N/A

NOTE: Absurdly high P/E and P/B suggest either:
  1. Data corruption/API error
  2. Near-zero or negative earnings/book value
  3. Extreme financial distress
Without reliable data, fundamental analysis is impossible.

EX-US SPECIFIC CHECKS
─────────────────────
US Revenue Analysis: Not disclosed
Status: NOT AVAILABLE

ADR Status: No evidence of ADR program found via web searches
(OTCQX/OTCQB/OTCPK, major ADR platforms).
Thesis Impact: PASS - No ADR found, favorable for "undiscovered" thesis.

Analyst Coverage: 0 US/English analysts
No reports found from major US/global English-language investment banks
or research firms.
Status: PASS for "undiscovered" thesis (<15 analyst threshold)

IBKR Accessibility: Direct
YTLPOWR.KL is listed on Bursa Malaysia and is directly accessible via
Interactive Brokers (IBKR) for US retail investors.

PFIC Risk: LOW
No indication of REIT status, holding company structure, or >50% passive
income generation.
```

**Analysis Verdict**: SELL  
**Rationale**: Uninvestable due to **complete data vacuum**. System cannot assess fundamental quality when all metrics return N/A or absurd values. While the stock passes the "undiscovered" criteria (0 analysts, no ADR), the **absence of reliable financial data makes it impossible to determine if this is a hidden gem or a value trap**. Conservative approach: reject until better data sources become available.

**This is NOT a failure of the thesis** - it's a failure of data infrastructure for emerging markets. Users analyzing Malaysian, Indonesian, or Thai stocks should expect similar challenges.

---

## Key Takeaways for Users

### When the System Excels
✅ **Liquid stocks on major exchanges** (HK, Japan, Taiwan, Korea, Singapore, UK, Germany, Switzerland)  
✅ **Mid-caps with some analyst coverage** (1-5 analysts provide data without violating "undiscovered" thesis)  
✅ **Companies with consistent reporting** (quarterly filings, English-language IR)  
✅ **Stocks where yfinance/FMP have good coverage** (Samsung, Tencent, HSBC-level names)

**Use Case**: "Rapid" (well, overnight) screening of 100+ candidates to find 5-10 BUY recommendations for deeper research

### When the System Struggles
❌ **Opaque emerging markets** (Malaysia, Indonesia, Philippines, Thailand)  
❌ **Micro-caps with zero coverage** (no analysts = no data breadcrumbs)  
❌ **Reporting lags** (annual-only filers, non-IFRS accounting)  
❌ **Language barriers** (local sentiment, non-English filings)  
❌ **Data corruption** (absurd metrics like P/E >1B signal API issues, not fundamentals)

**Use Case**: Flag potential red flags (data gaps, absurd metrics) for manual follow-up

### Recommended Workflow

1. **Run batch analysis** on 300+ candidates overnight
2. **Filter for BUYs** (expect 5-15 from 300 inputs)
3. **Review data quality**:
   - Good: HSBC-level (8/12 metrics available, reasonable values)
   - Ugly: YTL-level (0/12 metrics, absurd valuations)
4. **Manual deep-dive** on BUYs with good data quality:
   - Cross-reference with company IR websites
   - Check local news (Google Translate if needed)
   - Verify liquidity, P/E, etc. on actual brokerage platform
   - Read annual reports (AI-translated if need be) for qualitative risks
5. **Paper trade** top 2-3 picks before committing real capital

### System Philosophy

This tool is a **screening engine, not an oracle**. It democratizes the first 80% of institutional research (quantitative filtering) but cannot replace the final 20% (qualitative judgment). Use it to:

- **Generate shortlists** efficiently (100+ tickers → 5-10 BUYs in 12 hours)
- **Catch obvious red flags** (value traps, data gaps, illiquidity)
- **Enforce discipline** (hard gates prevent emotional trades)

Do NOT use it to:
- **Execute blindly** without manual verification
- **Analyze opaque markets** expecting perfect data
- **Trade micro-caps** (<$500M market cap, <$500k daily volume)

**Remember**: Even institutional analysts with Bloomberg Terminals get it wrong. A lot. This system aims to get you 80% there for $0 marginal cost. The final 20% is on you.

---

**Fork the repo, adjust thresholds, add better data sources, and make it yours.** The best trading system is one you understand deeply and trust completely.
