Overall Methodology WikiWeath's short term analysis focuses on three exclusively quantitative (mathematical) approaches to find the fair value of a target company. The fair value indicates whether you should buy, sell or hold your target company. If the stock price is below the fair value by a significant margin, then an investor should buy; if the opposite is true, then an investor should consider selling. |
Stock Research Conclusion50% Wall Street + 50% Main Street |
Overall Methodology WikiWeath's long term analysis focuses on a collection of important investor questions, which help to identify the intuitive value of a target company. These questions focused solely on the variables Warren Buffett finds important in his investments, so they may not find every undervalued company, but they will guide an investor towards the best companies with the least risk. A major element of this approach is the SWOT Analysis. |
Highest Possible RatingUndervalued - High Potential |
Middle RatingCorrect Price - Average Potential |
Lowest RatingOvervalued - Low Potential |
Detailed Rating Explanations |
Short Term Stock Research Ratings:
- Wikiwealth uses a safety margin of 50%, which means that the fair value of a stock has to be 50% higher (sell) or 50% lower (buy) than the current stock price to obtain a BUY or SELL rating.
- Buy: the stock is at a fair price to purchase. Safety margin of greater than 50%.
- Hold: the stock should not be bought or sold. Just hold the investment, because it is at fair value.
- Sell: the stock price is high, so an investor should consider selling. Safety margin is 50% below the market price.
- All approaches have a long-term view of stock prices. The longer your time horizon, the greater the chance that prices approach their fair value per share. Overvalued stock may stay overvalued for many years before suddenly and sharply dropping in price at the hint of bad news; the opposite is true for undervalue stocks. Some short term approaches judge a stock's value in relation to their competitors, so as a group of stocks increase in value, their relative value to this group may stay the same.
Long Term Stock Ratings:
- Long term ratings are a common sense approach to investing. They measure the potential of an investment and how likely the company can reach their potential based on their unique characteristics. It is difficult to measure the success of a brand name or workforce intelligence in mathematical terms, so these and many other variables are incorporated into this rating. The overall ratings for the qualitative analysis are a result of user input with professional guidance. Users have a direct impact on the value of a firm, because they buy and sell a firm's good and services. This first hand experience allows the consumer / investor to give their unbiased assessment of the qualities of a firm. High ratings on the investment questions will result in a buy rating for the investment. Low marks by consumer / investors will result in a sell rating for the stocks value.
- Buy: 4 or more average stars.
- Hold: between 2 and 4 average stars.
- Sell: 2 or less average stars.
