How we Rate Stocks
We have developed computer modeling software algorithms that execute our technical and fundamental analysis theories. The results of the technical analysis tell us the best time to get into a stock and when to get out of that stock. Both long and short positions are included in these results.
The results of the fundamental analysis tell us which stocks have strong or weak growth potential, based on the underlying company’s business health and performance.
We combine these two sets of ratings into a composite rating and generate a detailed result set for each stock. To see a sample of what our ratings look like, you can check out our Stock Pick of the Week. Our technical analysis shows us how a stock is trending, and what we should be doing with it if all we were using were technicals. The possible values for the technical analysis are:
Our fundamental analysis shows us how well the company has performed in the past using many different fundamental values. The results of which show what we should be doing with the stock if all we were using were fundamentals. The possible values for the fundamental analysis are:
By combining the technical and fundamental ratings, we can come up with a composite rating. This is a great tool because it helps you buy great stocks that give buy signals, and short bad stocks that give short signals. It's the best of both worlds! See the diagram below for how we combine the two ratings.
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The TurnerTrends ratings are reported on the Composite Rating, but you can search for Technical Ratings as many people don't care to go into the fundamentals of a stock. It's your choice! For the TurnerTrends Report, we use the composite rating because we're looking at more than a short-term trade.
IMPORTANT EXCEPTIONS: There will be times when a stock's Technical Rating is a "BUY" and its Fundamental Rating is a "BUY" or "STRONG BUY", which would normally mean that the "Composite Rating" would be a "BUY" or "STRONG BUY". But, because of either general market forces or late-breaking news, the stock's closing price for the week will have moved BELOW the TurnerTrends TrendLine. We will set the "Composite Rating" to a "HOLD" in those cases.
Likewise, there will be times when a stock's Technical Rating is a "SHORT" and its Fundamental Rating is a "STRONG SELL", but its Friday closing price has moved ABOVE the TurnerTrends TrendLine. In those instances, rather than provide a normal "Composite Rating" of "STRONG SELL", we will modify the stock's "Composite Rating" to a "HOLD". |
