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As a bright-eyed student at Cal State Hayward, I embarked on a journey to create a formula that could glide effortlessly with the S&P 500’s ups and downs. Hours of tireless market data analysis later, a revelation struck me…
My uniquely crafted model trounced the S&P 500’s performance!
Indeed, a certain group of stocks possessing distinct characteristics consistently edged out the S&P 500. Thus, the birth of Portfolio Grader!
Using a straightforward A to F grading system, Portfolio Grader assigns a Total Grade to thousands of stocks based on two pivotal characteristics. These traits become the game-changer in identifying stocks that promise unwavering profits.
In today’s Market 360, we delve into the inner workings of Portfolio Grader, how it led me to uncover a market leader par excellence, and how you, too, can leverage this tool to unearth stocks with robust fundamentals for your portfolio.
The Anatomy of Portfolio Grader
In determining the Total Grade of a stock, two core characteristics hold sway. Firstly, there are the sound fundamentals that form the bedrock of the Fundamental Grade.
These are the eight specific criteria I scrutinize to gauge a stock’s Fundamental Grade…
- Sales Growth: A true litmus test that underpins company vitality and expansion, genuine sales growth is the soul of great organizations, steadily amplifying their revenues.
- Operating Margin Growth: As the litmus test between production costs and sales prices, a wider margin implies a flourishing business. Companies increasing margins with stable sales prices signify potential for growth.
- Earnings Growth: The bedrock of measuring a company’s success, earnings growth showcases its profitability trajectory. Consistent year-over-year growth is what we covet.
- Earnings Momentum: This metric unveils the pace of a company’s progress based on its earnings. Upward momentum signifies a promising return on investment.
- Earnings Surprises: Exceeding analyst estimates is a feather in any company’s cap, primed to catapult its stock price. Routinely surpassing predictions leads to substantial share price increases.
- Analyst Earnings Revisions: A vote of confidence from Wall Street analysts, upward revisions in earnings forecasts speak volumes about a company’s financial health and future potential.
- Cash Flow: The lifeblood of any enterprise, robust cash flow post-expenditure showcases financial health. The more the cash, the merrier!
- Return on Equity: The litmus test for gauging a company’s efficiency in utilizing shareholder investments, shedding light on resource management proficiency.
The second defining factor is the level of buying pressure, shaping the Quantitative Grade.
Interpreting buying pressure reveals the flow of “astute money” in the market. This influx, comprising institutional investors like investment banks and hedge funds, propels the stock’s momentum upward.
Marrying the Fundamental Grade and Quantitative Grade begets the Total Grade. This all-encompassing grade offers a current recommendation in the form of a letter grade, delineating the stock’s investment viability.
- A=Strong Buy
- B=Buy
- C=Hold
- D=Sell
- F=Strong Sell
Leveraging Portfolio Grader for Your Portfolio
To unveil a stock’s grade, simply input the stock name into Portfolio Grader and hit Submit.
Moreover, Portfolio Grader excels in a unique function: grading your entire portfolio. Enter a blend of stocks to fetch the Total Portfolio Grade and peruse my Portfolio Review effortlessly.
To unearth a specific Fundamental Grade for a stock, click the “Stock Report” button showcased below.
Brimming with real-time stock news and insightful commentary, live stock quotes, and a comprehensive view of fundamental stock analysis, Portfolio Grader is your financial ally.
Should you desire, stash your portfolio for future reference! Just ensure you’re logged in before saving your treasure trove of stocks.
Portfolio Grader undergoes a weekly refresh every Monday morning, offering insight into any stock grade fluctuations.
Pioneering the Hunt for Market Leaders
With Portfolio Grader’s inner workings laid bare, you might be pondering its prowess in yielding results.
The answer is a resounding yes.
Case in point, in my exclusive Growth Investor service, Portfolio Grader led me to unearth one of the top-performing stocks featured in our esteemed High-Growth Buy List – Novo Nordisk A/S (NVO).
A trailblazer in biotechnology, Novo Nordisk pioneers treatments for diabetes, weight loss, and chronic ailments. Familiar with Ozempic and Wegovy – flagship treatments in their arsenal?
Back in late January 2023, I heralded NVO to my Growth Investor followers. Earnings projections for the fourth quarter hinted at an impressive 18.3% year-over-year surge to $0.84 per share, eclipsing previous estimates of $0.77 per share. With an A in Quantitative Grade and a C in Fundamental Grade, NVO soared with an overall Total Grade of A.
When the fiscal year 2023 earnings unfurled on February 1, 2023, NVO dazzled. Diabetes and obesity sales surged by 29% year-over-year, while rare disease sales ballooned by 7%. Remarkably, Ozempic sales soared by 45% year-over-year.
NVO continued its stupendous performance throughout 2023. Fast-forward to January 31 this year when NVO’s fiscal year 2023 earnings report dropped, shattering expectations. A staggering 31% year-over-year surge in fourth-quarter sales, with obesity care sales skyrocketing by 38%, was music to investors’ ears. Clocking fourth-quarter earnings of $3.17 billion, or $0.71 per share, and total sales of $9.51 billion, NVO exceeded analysts’ earnings estimates of $0.65 per share on $8.81 billion, clinching a remarkable 9.2% earnings surprise.
In the Growth Investor sphere, NVO reigns supreme as a beacon of exceptional fundamentals and steadfast institutional buying pressure. Currently enjoying a 90% surge on NVO, we’ve left the S&P 500’s 30% gain trailing in our wake.
Anticipating further gains? Portfolio Grader gives a resounding affirmation with its A in Quantitative Grade, B in Fundamental Grade, and an overall Total Grade of A, underscoring NVO’s status as a must-have stock in any growth-focused portfolio.
Myriad examples tout Portfolio Grader’s prowess in delivering stellar results. Yet, rather than regaling you with anecdotes, I invite you to immerse yourself in its utility firsthand. Free to use, it distills multifaceted factors into a user-friendly format for your convenience.
If a deeper dive is on your radar for curated picks tailored to your needs, delve into my Growth Investor service. Housing cream-of-the-crop selections from my extensive database, it’s a beacon for companies boasting exceptional fundamentals and enduring institutional support.
(Already part of Growth Investor? Click here to access the member-exclusive domain.)
Cheers,
Louis Navellier
Editor, Market 360
For transparency’s sake, the Editor confirms ownership, either directly or indirectly, of the following securities referenced or recommended in this context:
Novo Nordisk A/S (NVO) and Super Micro Computer, Inc. (SMCI)
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