Stock Analysis Pages
How to Understand the TipRanks Smart Score
The Smart Score is a proprietary quantitative stock scoring system created by TipRanks. We calculate the Smart Score based on a combination of eight key factors and derive a ranking from 1 to 10, with 10 being the best, called the “Perfect 10” Smart Score. A lower score, of between 1 and 3, indicates that the stock will underperform market expectations; a score between 4 and 7 implies the stock will perform in line with market expectations; and a score between 8 and 10 implies the stock will outperform market expectations. Based on a study of a stock’s Smart Score, you can decide whether to invest in the stock.
The score is data-driven and does not involve any human intervention. Six of the eight market factors which are incorporated into the Smart Score calculation are unique to TipRanks; only the technical and fundamental factors are not. The Smart Score is updated every day using data from the end of the previous day.
The contributing market factors are:
- Wall Street Analyst Consensus
- Financial Blogger Sentiment
- Hedge Fund Trend
- Corporate Insider Transactions
- Crowd Wisdom (retail investor sentiment)
- News Sentiment
- Technicals
- Fundamentals
To view the Smart Score of any stock, go to the Stock Analysis page of the stock. On the page, you will see the Smart Score in a graphical representation. Plus, the Smart Score chart shows you how the stock is performing according to each of the eight individual components of the score.
The Smart Score is also useful for investors who are faced with contradictory signals on a stock. For example, how can you assess a stock when analysts are saying Buy, yet Hedge Funds are selling? When you research a stock on TipRanks, you can see its Smart Score, which gives you an overall assessment of the stock, as well as an overview of the underlying factors.
From our historical study, it has been proven that stocks with a high smart score have the potential to outperform market expectations and are thus an apt fit for your portfolio. Our studies, which have been back-tested to 2016, found that the returns generated by stocks with a high Smart Score have historically outperformed those generated by the S&P 500 (SPX) index.
How to Use the TipRanks Smart Score in Your Investment Strategy
One of the biggest challenges that investors face is how to conduct comprehensive research, especially when there is contradictory data about a single stock. The TipRanks Smart Score provides you with a data-driven score, giving you a simple way to assess a stock’s potential. The score is 100% driven by data and does not involve any human intervention.
The TipRanks Smart Score measures stocks on 8 key market factors and scores them from one to ten. Through our studies, which are back-tested to 2016, we have learned that the returns generated by stocks with a high Smart Score have historically outperformed those generated by the S&P 500 (SPX) index.
So, how can you use the Smart Score to aid your stock-picking journey? We have a solution for you. TipRanks consolidates a list of stocks with a Perfect 10! Smart Score under the Top Smart Score Stocks screener page. This list helps investors analyze stocks easily and quickly. You can find this page on the top menu, under Stock Ideas – Top Smart Score Stocks.
You can access this list to see which stocks have the best possible chances of outperforming market expectations. Not just that, the Smart Score also rules out the likelihood of relying on just one indicator, such as analyst rating or corporate insider trading activities. By giving a combined data-driven score based on eight different factors, Smart Score eliminates bias and gives you a more refined list of the best stocks. By investing in these Top Smart Score stocks, you can improve your chances of earning outstanding returns.
On the Top Smart Score Stocks page, you will see a graphical representation of the Top Smart Score Stocks’ Performance (since 2016). The chart shows the Total Return generated by the Top Smart Score stocks since 2016, the Alpha Over the S&P 500 (excess returns earned over the SPX), and the Average Annualized Return.
Below this chart, you will see the table of the Stocks with Highest Smart Score (the top 5% of stocks from the TipRanks rating system).
The list displays the Name and ticker symbol of the company, the latest stock Price, the Price Change for one day, the Sector to which the stock belongs, the number of days when the stock has a Top Score Since, the Market Cap of the stock, P/E Ratio, Yearly Gain (in % terms), Price Chart (7 days), Smart Score, and the option to Follow the stock.
Moreover, you can choose to view the list as per the data you choose by ticking elements under the Select Columns tab. Plus, you can filter the list for the Market Cap (Mega/Large/Medium/Small/Micro), the Sector focus, and the Top Score Since. The Top Score Since tab is important as it tells you the consistency of the stock’s Top Smart Score. The tab has options, namely Last 24 Hours, Last Week, Last 1 to 2 Weeks, Last 2 to 4 Weeks, and More than 4 Weeks. The higher the number of days for which the stock has maintained a Top Smart Score, the better, as it implies the stock has been performing excellently on all 8 key factors for quite a while. As with all TipRanks tools, you can select the geography for which you want to see the list of Top Smart Score Stocks.
How to Read All the Data Points in the “Stock Charts & Stats” Section, and How to Use Them in Your Investing Strategy
On the Stock Analysis page of the stock that you are researching, you will see a Stock Chart & Stats graph at the top. The chart displays the Price Chart of the stock for varying periods ranging from 1 day, 6 Months, 1 Year to 5 Years. When you hover the cursor over the price chart, you can see the latest closing Price and Volume traded for the stock on a particular date. Plus, you have the option to view the chart type in the line format, area format, or candle format.
Below the chart, you can see information on all the important Stats for the stock as detailed below:
Popular Statistics – Under this section, you will view the statistics that are most commonly followed to analyze a stock. These include the stock’s Day’s Range (low and high), 52-Week Range (low and high), Previous Close, Volume traded, Average Volume (3M) traded in the last three months, Market Cap (shares outstanding x latest closing price), Enterprise Value, Total Cash and Total Debt as per the latest filing, Price to Earnings per share (P/E) ratio, Beta (risk metric), the Next Earnings date for the quarterly results, the EPS Estimate (earnings per share) for the upcoming quarter, the Next Dividend Ex-Date for the stock, and the Dividend Yield.
Share Statistics – When you click on the Show More button, you will view some more stats. First come the Share Statistics, which include data on the stock’s share price movement, which is essential to understand how the stock has been behaving in the past. The metrics include EPS (TTM) – earnings per share for the trailing twelve months, Shares Outstanding as of date, and the stock’s trading volume based on 10 Day Avg. Volume and 30 Day Avg. Volume, Standard Deviation of the stock (market volatility, a lower number is better), R-Squared (higher value shows higher correlation with the benchmark), and the stock’s Alpha (excess return on investment).
Financial Highlights & Ratios – This section includes important ratios and financial figures that will give you a clue into the stock’s financial health. The metrics include Price to Book (P/B) ratio, Price to Sales (P/S) ratio, Price to Cash Flow (P/CF) ratio, Price to Free Cash Flow (P/FCF) ratio, Enterprise Value/Market Cap, Enterprise Value/Revenue, Enterprise Value/Gross Profit, and Enterprise Value/EBITDA (Earnings before interest tax depreciation and amortization).
Forecast – This section includes the forecasted metrics that help in understanding the stock’s future trajectory. The information includes the 1Yr Price Target on the stock (as derived from analyst ratings), the related Price Target Upside for the stock for the next 12 months, the average analyst Rating Consensus on the stock, and the Number of Analyst Covering the stock.
Investors often study both the fundamental and technical analyses of a stock before making an investment decision. By studying the past performance, present performance, and future expectations of a stock in the Stock Chart & Stats section, you can decide whether it is meaningful to invest in the stock.
All the Charts You Will Find on the Stock Analysis Page, and How to Use Them in Your Investing Strategy
The TipRanks Stock Analysis Page shows various charts that can assist you in selecting stocks. As explained in the section above, the Stock Chart & Stats section displays all the important share-related data and financial metrics of the stock’s past, present, and future performance.
Further, the Stock Smart Score chart shows the TipRanks Smart Score for the stock, which is derived from the 8 key market factors of a stock. Plus, the Smart Score chart shows you how the stock is performing according to each of the eight different components of the score. A score between 8 to 10 implies a higher potential to outperform market expectations and thus an apt choice to add to your portfolio. On the other hand, a score between 1 to 3 implies a higher probability of underperforming the market and hence a wise decision to exit the stock.
As you scroll down, you will find the stock’s News section. You will find the headlines of all the latest news on the stock. Click on any headline to read the full article.
Besides the news section, you will find the basic Company Description including its Business Model, Sector and Industry focus, name of the company’s CEO, number of Employees, the corporate Website address, the ISIN number, and the company’s corporate headquarters Address.
Further below, you will see six other sections. One displays the list of the Top 5 ETFs holding the stock. You will see the Name of the ETF, its Market Value, and the ETF’s Smart Score on the table.
Next, you will see a section on the Financials of the stock. Here, you can see important line items from the Income Statement namely, Revenue, Earnings, and Profit Margin plotted on a graph for various time periods. You can click on the Balance Sheet tab to view the Assets, Liabilities, and Debt to Assets ratio plotted on a graph. And lastly, you can view the cash flow generated by the Operating, Investing, and Financing activities plotted on a graph for different time periods on the Cash Flow tab. For all these tabs, you can switch between the Annual and Quarterly time frames.
Additionally, you can study the stock’s historical earnings beat/miss performance, on the Forecast EPS vs Actual EPS graph for six quarters. The graph gives information on the EPS Estimate, earnings Beats, and earnings Misses.
Further down on the page, you will see three small charts. One will show you the stock’s Main Risk Category, which can be studied further by going to the stocks’ Risk Analysis page. Next, you will see data on the Product Monthly Users (number of people who visit the stock’s website), which is linked to the stock’s Website Traffic page. And a third chart shows you a list of Similar Stocks, with the Company name, the Price & Change for one day, and the option to Follow.
