Best of the rest?

August 19, 2015 09:00 AM

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In order to come up with the best selections from  750 stocks from the Russell 1000, Standpoint Research looks at 155 variables from 32 categories and further breaks it down based on fundamental variables, technical variables and valuation variables to come up with one final T score. 

The method took five years to develop. Some miscellaneous variables fall outside traditional analysis and are proprietary.  

“Testing the best,” shows the top 25 stocks from a field of 750. Green indicates areas of strength, and orange and red show areas of weakness and concern. Every company is going to have some red and orange marks on its profile. This is not necessarily negative, especially in the technical score, but calls for further investigation.

Most of the high-ranking names according to the computer model will have green marks on valuation and fundamentals and a red or orange mark on technicals (technicals are a contrarian indicator). 

The technical score is a contrarian indicator at the extreme. Stocks, when in the top 10% or 15% on relative strength, are potential shorts and those in the bottom 10% or 15% are potential buys on relative strength. A red mark on relative strength is a positive if it is scoring well on the other variables; that is the combination to look for.

 

About the Author

Ronnie Moas is the founder and director of research at Standpoint Research. TipRanks recently ranked Ronnie #1 in a ranking of 3,500 analysts evaluating more than 400 of his recommendations since 2008. Ronnie Ideas are generated by a 155-variable computer model after heavy fundamental and subjective overlays are applied. Ronnie is also the founder of philanthropyandphilosophy.com. Research free trial at StandpointResearch.com @RonnieMoas