The UK Investor Magazine was delighted to welcome Ed Croft, CEO of Stockopedia, back to the podcast to delve into Stockopedia’s rules-based investing indicators and how investors can gain an edge on share price re-ratings.
In this episode, he discusses new research into a pattern he had traded on instinct for years: what happens when a company’s quality score jumps sharply upward.
Register for the webinar here.
The conversation covers:
What a StockRank is: how Stockopedia scores every company on the market out of 100 based on how good, how cheap and how improving the business is, and why the top-ranked shares have historically outperformed while the lowest-ranked have lagged.
Why the score jumps: the public information that drives a sudden re-rating, from company results and broker upgrades to the language in a trading statement, which often shifts before the numbers do.
The central finding: why change beats level, and how the company that has just become excellent tends to outperform the one that was always excellent.
Why the market is slow to catch on: the decades-old academic thinking behind the effect, and why it is strongest among the small companies institutions cannot reach.
Where it works and where it fails: the sweet spot, the danger zones, real companies that quietly re-rated, why the well-known compounders never triggered the signal, and a Rolls-Royce case where the score turned ahead of the headlines.
What to do with it: practical rules for using a jump as a trigger to research rather than a signal to buy, when to sell, and an honest account of where the approach falls short.
Find out more: Register for further insights here.