Investment score
Kereon's 0–1 ranking of a company as a long-term holding, from filings, estimates and ownership — shown with a letter grade from A+ to F. Also called the Kereon score.
Seven categories are graded from the metrics underneath them and combined with fixed weights. It ranks businesses, not trades: price momentum carries 3% of the weight.
Formula
Score = Σ (category score × weight) ÷ Σ weights of the graded categories
Inputs
- Business quality (26%). Revenue and EPS growth, gross, operating and net margin, ROIC, ROE, ROA, gross profitability, FCF margin, growth and conversion, earnings quality, asset turnover.
- Valuation (18%). Forward P/E, PEG, EV/EBITDA, EV/FCF, EV/sales, price/sales, price/book, FCF yield, and the P/E against its own history, its sector and its industry.
- Growth (18%). 3- and 5-year revenue and EPS CAGRs, this year's estimates, margin expansion, 3-year FCF CAGR, growth against its sector.
- Financial strength (16%). Debt/equity, net debt/EBITDA, interest coverage, current and quick ratios, Piotroski, Altman Z.
- Institutional confidence (10%). Institutional ownership, 13F net accumulation, insider net buying, estimate revisions and the 30-day estimate change, price-target upside, analyst consensus.
- Business stability (9%). Beat rate, revenue up-years, profitable years, margin volatility, dividend record.
- Momentum (3%). 52-week return, distance from the 200-day average and from the 52-week high.
How to read it
A+ from 0.90, A 0.82, A− 0.75, B+ 0.68, B 0.61, B− 0.55, C+ 0.48, C 0.41, C− 0.35, D+ 0.28, D 0.20, F below. Confidence is the share of the intended weight that could be graded: 1.00 means every category had enough data.
How to use it
Decide where research time goes first, then read the reasons and concerns printed with it — each names the number that triggered it. Compare grades within a sector: a bank and a software company are graded on very different evidence.
Limitations
A research agenda, not a forecast or a recommendation. It is only as complete as the vendor's coverage, which is why confidence is shown. Every scale is a fixed straight line, so values past either end score the same.
In Kereon
Investing · company. Each metric is placed on a straight line between a value that scores 0 and one that scores 1 (lower-is-better metrics run the other way) and clipped. A category is the weighted mean of the metrics it has — a missing metric leaves both the sum and the weights — and is graded only when at least 45% of its metric weight is present. The total is then reweighted over the graded categories.
Prospects · Candidates. Lists names scoring at least 0.35 with confidence of at least 0.45.
Prospects · Matchup. Shows the score on each card without saying which is higher.
Also called: kereon score, investment grade, grade, confidence, research score, candidates, reasons and concerns.