If you browse through our stock listings, you’ll immediately notice a “star” stock rating next to every asset labeled something like “Unicorn Bay rating 4.9/5”. This stock rating is our take on the asset valuation calculated by measuring a range of parameters.
Let’s have a look at how Unicorn Bay stock rating helps you determine the health of a certain asset.
In order to calculate asset valuation, we monitor more than 5,000 different stocks on a daily basis, recording their basic characteristics such as whether or not the stock pays dividends (and how much, if it does), what is the stock’s price to earnings ratio, and so on.
Building such a large database, we cannot help but start comparing stocks to each other, calculating, for example, whether the particular stock pays more or fewer dividends per dollar compared to industry average. These comparison results are also recorded as positive factors (if the stock performs better than the market) or negative factors (if the stock’s performance trails the market). Now, having such a comprehensive database, we can assign weights to each determining factor in order to calculate an aggregate rating representing our take on the asset’s valuation.
What about an example?
Let’s take, for example, the following stock: Paychex Inc. The moment we captured the data, PAYX had 6 positive signs and 3 negative signs. Some of these signs are available in the stock’s detailed view:
The company pays dividends, which we consider a positive factor. Wall Street valuation of this asset is lower than the current price per share, which is a negative factor indicating that the stock might be overpriced. However, the difference between Wall Street price and current price per share is only 11.66%, which is low enough to assign a “yellow” rating to this factor instead of a “red” one.
Let’s look beyond valuations. PAYX has two strong positive factors: the company pays significantly higher dividends compared to a sector, and its dividends are higher than the industry average. In practice, this means that the company pays more per share compared to its direct competitors, which is a good indicator of the company’s health. The difference is significant enough to assign the weight of 5 out of 5 for both of these factors.
Now, the company’s Price-to-Earnings ratio is higher than the industry average and higher than the sector average, which is not great considering investors income per dollar. The difference is large enough to assign an “orange” rating, but still not quite as significant to justify the “red” one.
Our algorithms analyze a large number of factors for each and every asset monitored by Unicorn Bay. Each asset is compared to stocks issued by the company’s direct competitors as well as the market as a whole. Since the number of factors we analyze is large enough to confuse a non-professional investor, we aggregate all of these factors to calculate a single rating representing our asset valuation.
This is what we call the Unicorn Bay stock Rating. The rating is an integral valuation that takes into account the many positive and negative factors weighed by their respective strength. Unicorn Bay stock Rating is a floating number in the range of 1 to 5, where 1 represents the lowest asset valuation and 5 is the highest possible rating.
We make it easy to locate assets performing the best. Just navigate to Unicorn Bay Explorer and sort stocks by Unicorn Bay rating.
We hope you will find our asset valuation rating handy when picking assets for your portfolio.
Good luck with your investments!
Founder & CEO at Unicorn Bay. Masters Degree in CAD/CAE developed several portfolio optimizing products for banks. Has a great experience in investments and math behind the Portfolio Risk Management.