Methodology for ranking stocks

The ranking is achieved by sorting the value of a given parameter (e.g. P/E) for all stocks covered by Stockworm, ('market' ranking) and then sorting the same parameter for all stocks within the industry ('industry' ranking). The last step of ranking is to decide what is good or bad for a given parameter. For example, it is assumed that an extremely high P/E is a bad stock quality, so the highest P/E stocks get a low rank and the lowest P/E stocks get a high rank.

You can override the default behavior of good versus bad characteristics. For example, if you actually like high P/E stocks, then you can request high P/E stocks when performing stock screens.

Colored ranking bars

The colored ranking bars are a way of quickly evaluating the ranking of a given stock within the market as a whole (top of each fundamentals page) and within its industry group (bottom of each fundamentals page).

These bars are provided for each category within the 'Fundamentals' portion of the stock analysis pages (Profile, Profitability, Earnings, Ratios, Valuation, and Sentiment). The middle section of the bar presents the median value of a parameter (50% of stocks are below the median and 50% of the stocks are above the median).

If the bar is above the median line, then the stock has a higher rank for this parameter than the median. Bars below the median line have a lower rank than the median.

The height and color of the bars indicate how far above or below the median that a given stock is. For example, the top 10% of stocks will have a tall green bar above the median. The bottom 10% will have a tall red bar below the median.

Thumbnail ranking images

The thumbnail ranking images give an overview of a given stock at a glance. Thumbnails are used in Stockworm stock report cards. The thumbnails are divided into six sections by alternating gray and white background colors. These six sections represent the six fundamental categories: Profile, Profitability, Earnings, Ratios, Valuation, Sentiment, respectively.

The top section of each thumbnail represents the market rankings.

The lower section of each image represents the industry rankings

Note: the upper black line on the image represents the market median while the lower black line represents the industry median.

As an example, compare the highlighted thumbnail section below with the full-sized color ranking bars shown for earnings growth in the "colored ranking bars" section, above.