Methodology

Our proprietary stock ranking system employs a multi-factor quantitative approach, drawing inspiration from the principles outlined in Wesley Gray's Quantitative Value, the work of Joel Greenblatt, and others. The algorithm synthesizes key financial metrics to evaluate and rank stocks based on both value and quality factors.

• Earnings Yield (30% weight): Calculated as EBIT / Enterprise Value, this metric identifies potentially undervalued companies.
• Gross Profitability to Total Assets (30% weight): A quality factor that measures a company's efficiency in utilizing assets to generate profits.
• 3-Year Revenue Growth (15% weight): Rewards companies with stronger multi-year top-line growth.
• Year-over-Year Revenue Growth (15% weight): Adds a shorter-term growth signal to capture current business momentum.
• Book Value to Market Price (5% weight): A traditional value factor to identify potentially undervalued stocks.
• Year-over-Year Shares Outstanding Change (5% weight): Favors companies reducing share count, which can indicate shareholder-friendly capital allocation.

The system calculates percentile ranks for these factors and combines them into a final score. This multi-dimensional approach aims to identify stocks that exhibit strong value characteristics while also taking into consideration growth profiles, potentially yielding a more holistic view of a stock's investment potential.