The Quality tab: 37 factors, one score
Profitability, financial strength, growth quality and more, and how to read the bars.
You will learn
- Which factor groups make up the score
- How green, amber and red bars move the number
- What score counts as high, solid or weak
Transcript
Lesson five: the quality score. Cheap tells you about the price. Quality tells you about the business.
The score runs from zero to one hundred and is built from thirty-seven factors in groups: profitability, financial strength, growth quality, cash flow, investment, momentum and more. Each group has its own sub-score.
Every factor is a bar. Green bars pull the score up, orange and red bars pull it down. So you see at a glance where a company is strong and where it is weak, for example high margins but weak momentum.
Some things a balance sheet cannot show, like whether a company has a moat that keeps competitors out. For that we add an AI assessment with six factors, clearly marked as an estimate.
How to use it: a score above seventy-five counts as high, above fifty as solid, below forty deserves a hard look. And the combination you want is high quality at a price below fair value. That is what the strategies in a later lesson search for.