Interim financial statements are generally unaudited and do not adhere to GAAP as strictly as the annual ones.
The framework of Benjamin Graham — Warren Buffett's mentor and the founder of Value Investing — is based on annual data as well. The Graham Number requires the average EPS of the past three years, Earnings and Dividends are checked over periods of 5-20 years, and so on.
Thus, once a stock is evaluated against Graham's framework using its annual data, it does not need to be reevaluated every quarter. A full Graham analysis is valid for a minimum of one year; and often stays valid for longer. Drastic changes are highly unlikely in a correctly diversified Graham portfolio.
Therefore, analyses by Serenity are done almost exclusively with annual data; the only exception being the NCAV grade which requires positive trailing 12 months (TTM) earnings.
But different companies release their annual results at different times of the year. So Serenity's database is updated throughout the year, reflecting the latest annual data for stocks available at the time.
High Margin Of Safety
Graham's framework also includes multiple rules for quality and diversification. These rules ensure that an investor always errs on the side of caution, and that even the occasional misstep has no significant effect on one's portfolio.
Value Investing is a long-term activity by definition. Stocks are usually valued by the general market based on their expected results, and not their current status.
So short-term changes in a stock's grading need not be taken too seriously, as Graham explains below.
"Most businesses change in character and quality over the years, sometimes for the better, perhaps more often for the worse. The investor need not watch his companies’ performance like a hawk; but he should give it a good, hard look from time to time."