Research - Questrade Trading

The Smart Score is a proprietary quantitative stock scoring system created by TipRanks. It rates stocks from one to ten, based on 8 key market factors. The lowest score is a 1 and the highest is 10. The scoring system works as follows:

• Stocks with a score of 1, 2, or 3 are considered to be Underperforming
• Stocks with a score of 4, 5, 6, or 7 are considered to be Neutral
• Stocks with a score of 8, 9, or 10 are considered to be Outperforming

The score is data-driven and does not involve any human intervention. Let’s take a deeper-dive on exactly how TipRanks calculates the Smart Score:

How is the Smart Score calculated?

The 8 market factors that contribute to the rating are: analyst ratings, insider transactions, blogger opinions, investor sentiment, hedge fund activity, news sentiment, technicals, and fundamentals. 

These individual components are explained in more detail below.

These eight factors equally contribute to the rating, and each factor makes up 12.5% of the Smart Score.

The Fundamentals, and Technicals are divided into two sub-categories each representing 6.25%

• Technicals: SMA - 6.25% (simple moving average at 20 and 200 days), and Momentum - 6.25% (12 months change)
• Fundamentals: Return on equity - 6.25% (trailing 12 months), and Asset growth - 6.25% (trailing 12 months)

If any of the eight factors are not available, they are considered to be contributing a neutral value to the Smart Score.

The top ranking ~4% of stocks receive a Smart Score of 10. The next ~7% get a Smart Score of 9 and so on.

As the number of securities analyzed by TipRanks changes (due to new coverage, listings or IPOs) the Smart Score may also change, even if the 8 market factors remain the same.

Market factors contributing to the Smart Score

These are the eight market factors that contribute to the Smart score:

Financial analyst ratings

Analyst consensus is based on sell side analyst ratings issued within the last 3 months.

Corporate insider transactions

Insider Activity provides you with insight into whether corporate insiders are net buyers or sellers of the company’s stock.

Financial blogger opinions

Blogger sentiment is based on blog posts analyzed by TipRanks’ natural language processing technology.

Please note: Bloggers publish their own personal opinions and may not have any formal education or qualifications.

Bloggers consensus is based on tracking and measuring the performance of over 50,000 individuals. Data is based on Tipranks’ three tier  proprietary formula, which ranks them based on the following:

1. Success Rate - This measures the win-to-loss ratio
   • For example: The number of accurate vs inaccurate picks. 10 losing transactions cannot be offset by one winning transaction with a high profit
2. Average Return - a bloggers overall performance
3. Statistical Significance - a measure of the blogger's consistency based on the number of submissions received
   • For example: A blogger with a 1000% average return but with 1 submission would rank very low. A blogger with a 2% average return with many submissions would rank very high.

Individual investor sentiment

Sentiment is based on the percentage of portfolio increase or decrease in the last 7 and 30 days by hundreds of thousands of individual portfolios of TipRanks subscribers.

Hedge fund manager activity

Hedge Fund Activity is an indicator of the net Hedge Fund purchases or sales in the previous quarter.

News sentiment

Sentiment is based on the last seven days of news stories analyzed by TipRanks’ natural language processing technology, and can show you the trends in current news sentiment for this specific ticker.

Fundamentals

The fundamentals measurement is split into 2 categories: Return on Equity, and Asset growth. Both of these are measured for the last 12 months trailing when corporate earnings information is publicly available.

Technicals

The technicals measurement is also split into 2 categories: SMA (Simple moving average) over 20 and 200 days, and the Momentum (12 months change).

Please note: Research, daily ratings, trending stocks, and Smart Score are provided by TipRanks. The availability of these services and the information that may be conveyed through them do not constitute any form of trading or investment advice by Questrade. Questrade cannot guarantee the timeliness, accuracy, and reliability of these Tipranks services and the information that may be conveyed through their use. Questrade will not be held liable nor assume any liability for any loss or damages arising directly or indirectly from the use of these Tipranks services. Any liability, whether direct, indirect or consequential loss or damage is explicitly disclaimed.