Capital Wisdom - Methodology


At Capital Wisdom, we use a comprehensive methodology to rate stocks. Our methodology takes into account various factors to provide a holistic view of a stock's potential. Here is a breakdown of our methodology:

  • Technical Targets: We evaluate whether the stock has reached or is pending its technical price targets.
  • Fundamental Targets: We assess the stock's fair price based on fundamental analysis and check if it has reached or is pending this target.
  • Consensus Targets: We consider the average target price from various analysts and check if the stock has reached or is pending this target.
  • PEG Ratio: We analyze the stock's PEG ratio to understand its valuation relative to its growth. A PEG ratio below 1.2 is considered favorable.
  • Profit Margins: We look at the company's profit margins and compare them to industry standards.
  • Debt-to-Revenue Ratio: We evaluate the company's debt relative to its revenue to understand its financial health.
  • Insider Transactions: We consider insider buying and selling activities as indicators of the stock's potential.
  • Long-term and Short-term Liquidity: We assess the stock's long-term and short-term liquidity targets relative to its current liquidity.

Based on these factors, we assign a Capital Wisdom Rank to each stock, which helps investors make informed decisions.

Capital Wisdom - Backtest

We have backtested our methodology by running the evaluation on more than 6,000 stocks over 2.5 years of data. This process will continue to gather more input.

We are pleased to share our results with you.

Margin of Error: 19.32%

Accuracy: 80.68%

Part of this backtest is to check the percentage potential gains if you follow our method.

Average Profit Percentage: This shows the average percentage gain or loss if you had followed our "Buy" and "Sell" recommendations. This assumes you assigned the same capital to each stock.

Weighted Average Profit Percentage: This refines the average by giving more importance to stocks with larger market capitalizations. This assumes you assigned capital based on the market capitalization of each company, according to its size.

Average Mean Price Difference: 68.95%

Weighted Average Mean Price Difference: 42.14%

The potential gains have been observed in the period from 2022-09-11 to 2024-09-18.

In the same range of time, the SP500 did the following percentage gain: 36.75%

Capital Wisdom - About us

Capital Wisdom is an advanced platform dedicated to providing stock ratings, recommendations, and comprehensive financial analysis. Our goal is to help investors make informed decisions by offering accurate, reliable, and actionable insights.

Our team of experts evaluates over 6000 companies and ETFs using a blend of rigorous fundamental analysis, technical analysis, and consensus targets to assign a Capital Wisdom Rank. Our backtest results show that our methodology has the potential to generate significant gains for investors.

In addition to stock ratings, our platform offers portfolio tracking, insider analysis, and real-time Twitter updates for our community. We provide stock recommendations derived from our extensive analysis, enabling users to make informed decisions effectively. Our user-friendly interface simplifies the navigation of complex financial data, empowering investors with confidence in their decision-making.

Currently in the MVP stage, we are steadily expanding our system and community on social media platforms. In the near future, we plan to transition to a subscription-based model for access to our extensive information and analysis. Furthermore, we are exploring innovative ideas such as developing a chatbot for accessing insights and integrating our data with artificial intelligence.

At Capital Wisdom, we believe in transparency and integrity. We strive to provide accurate and unbiased information to help investors make the best decisions for their portfolios. Thank you for choosing Capital Wisdom. We look forward to helping you achieve your financial goals.