Trading Just Five Stocks (Refreshed Weekly), Our SmartRank Portfolio Has Generated an Avg 72.4%/Yr Return Since Jan 2008…
Every Stock Traded is Fully-Hedged Against Downside Market-Risk.
Step 1: Over 5,000 NYSE/Nasdaq Stocks Screened Against a Precise 12-Point Checklist…
Every Friday (after the close), our computers run a systematic algorithm, which screens over 5,000 NYSE/Nasdaq stocks, against a precisely formulated 12-rule checklist of deep-value company fundamentals, plus technical ‘timing’ indicators.
Every stock is automatically given a SmartRank score (between 0-100), based on the 12-point algorithm.
Step 2: We Trade the Top 5 Ranking Stocks (Updated Weekly)…
Stocks are automatically ranked into a sort-order. The stock with the highest SmartRank score is listed at the top. The stock with the second highest score is listed second. And so on…
Companies with the highest SmartRank score (nearest the top of the list) provide the most optimum, deep-value trading opportunities. These are the (top-five) stocks we buy and hold over the next 7 days…
Step 3: Every Trade is Fully Hedged Against Downside Market-Risk…
Every trade we put on, is fully hedged by an equal-dollar value ‘short’ position in the S&P500 index ETF (symbol: SPY). For instance…
If we are $10,000 long a stock, we open a simultaneous ‘short’ position in the S&P500 index ETF (symbol: SPY) for the same value, providing protection against a market downturn…
By implementing a market-neutral “long-stock/short-SPY” position, we protect against market-risk. Our objective is to trade stocks which offer the highest probablity of outperforming the S&P500 index.
It doesn’t matter whether a stock moves up or down. What matters is that the stock outperforms the S&P.
So, in practical terms, if the stock moves up by more than the S&P500, we make a profit. If a stock moves down, but less so than the S&P500, we also make a profit. It is only in the [unusual] case that a stock moves up by less than the S&P (or moves down by more than the S&P) that the trade loses money.
This is why our proven 12-point stock-selection method is absolutely critical. The algorithm seeks out companies which have the highest probability of beating the S&P500 benchmark.
Based on eleven years of performance data, the method has consistently captured stocks within the smartrank five-stock portfolio, which have proven to outperform the S&P500 in 11/11 years since inception.
Trading the five-stock portfolio (fully hedged), the model has been profitable in 11/11 years, with an average 72.4%/year return since Jan 2008…
The Method – Step-by-Step…
At the core of everything we do, is the SmartRank algorithm – a precise integration of 12 intelligent stock-selection rules. The algorithm synergizes both company fundamentals (identifying the highest quality growth companies) and technical-indicators (volume, oversold readings, money-flow), for optimal entry-timing.
Here’s how the method works…
In the below example, you can see a snapshot of the 12-factor model algorithm applied to just one example stock, Humana Inc. (don’t worry if you don’t fully grasp the method – you don’t need to know all the nuts-and-bolts of the strategy to profit from it).
We run simultaneous screens across all 5,000+ NYSE/Nasdaq stocks, every Friday after the market-close.
Built into the 12-rule algorithm are nine fundamental indicators (gross margin growth, price/sales ratio, etc.), and three core technical ‘timing’ indicators (money-flow, volume-trend, technical-oversold readings).
Specifically, we apply 12 distinctive rules (factors). These are…
- Price/Sales Ratio (P/S Ratio)
- Enterprise-Value/Free-Cash-Flow (EV/FCF Ratio)
- Enterprise-Value/EBITDA (EV/EBITDA Ratio)
- Free-Cash-Flow/Capital (FCF/Capital Ratio)
- Debt/Capital Ratio
- Gross Margin Growth (Relative)
- Operating Margin Growth (Relative)
- Free-Cash-Flow Margin Growth (Relative)
- Revenue Sustainability
- Institutional (Smart-Money) Order-Flow
- Relative Volume Trend
- Technical Analysis Indicators (Oversold)
Each individual indicator is automatically given a ‘bullish-to-bearish score’ depending on how that indicator is performing ‘relative’ to history, and (for fundamentals) in relation to industry-peers/competitors.
The higher the score for a particular indicator, the more ‘bullish’ the stock is, based on that ‘singular’ indicator (also known as a single ‘factor’)…
The individual scores are then combined (depending on ‘weighting’ of each indicator) to return a total, simplified SmartRank score, between 0 to 100.
The higher the SmartRank score, the more ‘bullish’ the stock.
The objective is to capture the strongest businesses which offer deep-value/growth, trading at a relative-discount (undervalue), confirmed by smart-money-flow
This allows us to enter a stock at an optimal-value price point.
The algorithm targets specific stocks that have undergone a recent technical pullback, combined with pattern price/volume (positive accumulation) activity, backed by institutional (smart) money-flow.
This combined method (which fully integrates both qualitative company fundamentals and technical-analysis/timing indicators) delivers trading ideas which offer a high-probability of a profitable trade, and the opportunity for us (and our members) to profit from the resulting recovery/rally.
Based on reasoned logic, we always hold the top-five ranking stocks in the SmartRank portfolio. Every Monday, we run the screener to check (and share with our subscribers) the latest top-five stocks.
To protect against market-risk, every long position in a stock is always fully-hedged by an equal-dollar short position in the S&P500 index ETF (symbol: SPY). For example $5,000 ‘long’ AAPL + $5,000 ‘short’ SPY.
Smarter, Better Informed, Better Prepared Trades…
Every Sunday around 6pm, we publish the latest, top-five ranking stocks, based on the strategy. This allows us (and our subscribers) to see precisely which five stocks we will be holding over the next 7 days.
We ‘buy’ any new stock which has entered the top-five. We ‘sell’ (exit) any stock no longer in the top-five. We ‘hold’ any stock which continues to remain in the top-five.
Each time we buy a stock, we always hedge it with an equal-value short position in SPY. Subscribers can easily emulate our trades if they wish to do so.
Let Us Do the Math…
As a member, having access to pre-screened, superior-quality stock-picks will save hours of research time capturing those companies which offer the best value, relative to the 12-point algorithm…
Our members do not need to worry about every mathematical ratio, or complex fundamental or technical indicator. As a subscriber, you will receive full access to our members-only site, where we publish the top-five ranking stocks, updated every Sunday (around 6pm New York time), ready for the Monday open…
Members have full access to our helpdesk at any time (including weekends) throughout membership. Ask any questions, no matter how simple or complex. We are here to help you advance.
We don’t just stop at providing our weekly top-five report. Our goal is to make you a smarter, better informed, better-prepared trader. You will build confidence witnessing market-outperformance, trading alongside experienced, fully knowledgeable, self-directed traders.
We don’t just pick and trade stocks – we ensure every trade is protected against market-risk by hedging every long position with an equal-dollar value short in the S&P500 ETF…
This prudent approach has ensured that the SmartRank portfolio has not only been profitable in 11/11 years since inception, but [significantly] outperformed the S&P500 index every year (including through 2008 when the portfolio gained 132.38% against the S&P500 which was down -37% in that same year).
Our deep research tools, combined with a precise rule-based stock-selection approach, delivers a superior, more complete trading plan-of-action, one that has proven to deliver consistent profitability year after year.
Join us today, and start elevating your trading to a new level. To get started, click the subscribe link below. If you have any questions, please get in touch with us at any time.