Real Questions from Real Subscribers

Q: What do your sector-specific scores mean?

A: Dear Subscriber,

The 12-Factor and Reranked Overall scores are designed to compare stocks within a given sector. The criteria used to compute those scores differ from sector to sector.

So, to answer your question, a 12-Factor rank of 10 means a stock scores better than roughly 10% of the stocks in its sector. The sector-specific scores you see on our website only take into account components of the S&P 1500 Index and stocks recommended by Dow Theory Forecasts or its sister newsletter, Upside, which focuses on small-cap stocks.

While the sector-specific scores are of particular value when you seek to differentiate between two stocks in the same sector with similar Overall scores, they are also worth considering on their own merits. If a stock with a high Overall score also earns a strong 12-Factor or Reranked Overall score, it boosts our confidence in the predictive power of the Overall score.

Thanks for your interest,

Bob Sweet, CFA
Managing Editor, Dow Theory Forecasts

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