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
Now 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. Below the score you read what the AI concludes, where it sees the main risk, and what it currently points to.
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.
Common questions
How is the quality score built?
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.
What counts as a high quality score?
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.