How to Use Stock Rankings for Smarter Investing (2026 Guide)

#What Our Rankings Are

Our rankings evaluate approximately 3,000 U.S. stocks across six academically-validated factors:

1. 1Profitability (30%)
2. 2Momentum (25%)
3. 3Value (15%)
4. 4Low Volatility (10%)
5. 5Investment (10%)
6. 6Short Interest (10%)

Each stock receives a composite score (0-100) and star rating (1-5 stars).

#What Our Rankings Are NOT

• Not buy/sell recommendations – We provide information, not advice
• Not predictions – High-ranked stocks can still decline
• Not timing signals – We don't know when factors will pay off
• Not personalized – Your situation is unique; rankings are universal

#How to Read a Stock's Profile

The Composite Score

The composite score (0-100) reflects the stock's multi-factor quality. The overall score is calculated as 0.80 Ranking + 0.20 Timing, and all sub-metrics are ranked within sector peers (industry-neutral).

Star Rating

Stars are assigned using AQR-style fixed score thresholds — stars reflect absolute score quality, not forced distribution:

#Practical Use Cases

Use Case 1: Initial Screening

Goal: Narrow a large universe to manageable candidates

How: 1. Filter by minimum star rating (e.g., 4+ stars) 2. Apply sector constraints if desired 3. Result: 400-500 stocks instead of 3,000

What's next: Additional research on promising candidates

Use Case 2: Idea Validation

Goal: Check if a stock you're considering ranks well

How: 1. Look up the specific stock 2. Review composite score and individual factors 3. Identify strengths and weaknesses

What's next: - High score = confirmation of your thesis - Low score = dig deeper to understand why

Use Case 3: Portfolio Construction

Goal: Build a diversified portfolio tilted toward quality factors

How: 1. Select top-ranked stocks across sectors 2. Ensure diversification (not all in one industry) 3. Weight by conviction or equal-weight 4. Rebalance monthly or quarterly

#Building a Portfolio

Diversification Matters

Don't just buy the top 10 stocks. Consider:

• Sector balance – Avoid concentration in one industry
• Market cap mix – Include large, mid, and small caps
• Factor balance – Don't only buy highest-momentum or only value

Sample Approach

Portfolio Construction Example:
- Select top 5 stocks from each of 8-10 sectors
- Require 4+ stars minimum
- Equal weight within portfolio
- Rebalance monthly

This gives you 40-50 stocks, well-diversified, all with strong factor profiles.

#Time Horizon

Our factors have different optimal horizons:

Implication: - Short-term traders may emphasize momentum - Long-term investors may emphasize quality and value - Combining factors works across horizons

#The Right Mindset

Our rankings work best when you:

1. 1Use them as starting points – Not finished products
2. 2Combine with other research – Fundamental analysis, news, context
3. 3Think probabilistically – High scores = better odds, not certainties
4. 4Stay disciplined – Don't abandon factor investing when it struggles
5. 5Have realistic expectations – Factors add 2-5% annually, not 50%

#Important Disclaimers

• Rankings are for informational purposes only
• Not investment advice
• Past performance doesn't guarantee future results
• All investments involve risk
• Consult a qualified financial advisor

#Getting Started

Ready to explore?

1. 1View all rankings → – Browse the full universe
2. 2Methodology → – Understand how we rank
3. 3FAQ → – Common questions answered