Understanding the Stock Composite Rating Filter

The SCoRE (Stock Composite Rating) is a proprietary formula that measures a stock's technical and fundamental strength. We use over 15 metrics, mostly technical but with important fundamental data points, to measure each SCoRe. A stock can have a SCoRe between 30 to 100, with higher scores indicating better overall quality and performance potential. A stock with a rating closer to 100 is considered to have stronger fundamentals, better growth prospects, and more favorable technical indicators compared to a stock with a lower rating. Unlike the other rating systems, the SCoRe is dynamic, and will change in real-time during live market hours.

By using this filter, traders can identify stocks that meet certain quality criteria and may have strong potential for future growth or price appreciation.

Stock Composite Rating Filter Settings

Configuring the "Stock Composite Rating" filter is simple and can be done within the Window Specific Filters Tab of the Configuration Window in your Alert/Top List Window.

Here's how to set up the filter in your configuration window:

• Adjust the minimum value to 90 to see only high quality stocks with strong fundamentals.

• Adjust the maximum value to 60 to see only stocks with a lower SCoRE rating.

Using the Stock Composite Rating Filter

The "Stock Composite Rating" filter can be used in various trading strategies, including:

Focus on High-Rated Stocks: Prioritize stocks with composite ratings closer to 100, as they are considered to have stronger fundamentals and growth potential. These stocks may offer better long-term prospects and lower risk compared to lower-rated counterparts.

Confirmation with Technical Analysis: Use the composite rating as a confirmation tool alongside technical analysis indicators such as moving averages, trend lines, and momentum oscillators. Look for opportunities where high-rated stocks align with bullish technical signals, increasing the probability of successful trades.

Sector Rotation: Monitor sectors or industries with a concentration of high-rated stocks. Rotate into sectors showing strength and favorable composite ratings while avoiding or minimizing exposure to sectors with weaker ratings. This strategy capitalizes on broader market trends and sector-specific catalysts.

Contrarian Approach: Consider contrarian opportunities by looking for stocks with temporarily low composite ratings that have strong potential for turnaround or recovery. Conduct additional fundamental analysis to determine if the low rating is justified or if there are overlooked catalysts that could drive future performance.

FAQs

What does the composite rating represent?

• The composite rating is a single numerical score that evaluates a stock's overall fundamental and technical strength. It takes into account various factors such as earnings growth, sales growth, profit margins, return on equity, and price performance.

What is considered a good composite rating?

• A composite rating of 90 or above is generally considered excellent, indicating a stock with strong fundamental and technical characteristics. Ratings between 80 and 89 are considered good, while ratings below 80 may suggest weaker fundamentals or technicals.

Can the composite rating alone determine a stock's potential?

• While the composite rating provides valuable insights into a stock's overall strength, it should not be the sole factor considered for investment decisions. It's essential to conduct additional research, including fundamental analysis, technical analysis, and market conditions, to make well-informed investment choices.

Do higher-rated stocks always outperform lower-rated ones?

• While higher-rated stocks tend to have stronger fundamentals and technicals, there is no guarantee that they will outperform lower-rated stocks in every scenario. Market dynamics, sector trends, and company-specific factors can all influence stock performance.