Sabrient's multifaceted methodology, as applied to our long equity scorecards, is graphically depicted
in the annotated schematic shown below. The same methodology, minus segmentation by style and cap,
are used for all Sabrient scorecards, which are delivered electronically on a password-protected section of this website.
Please point to each number in the diagram for an explanation.
11. Final Quantitative Stock
Selection:
Final stock selections are disseminated by market
cap and investment strategy. Sabrient's systems reflect the
differing risk profiles, time horizons, trading frequency and other
preferences of all the major investing styles, allowing professional
investors an unprecedented degree of customization.
10. SABRE
Signals:
[Technical signals are no longer used.]
9. Sabrient Score:
The strongest candidates are classified by investing style and ranked by the major Sabrient score for each style.
8. External
Confirmation:
Ordered set of top prospects is benchmarked and
normalized against independent measures of risk/reward, group
strength, market consensus, and other confirmation factors.
7. Preconfirmation
Screen:
Utilizing composite ranking techniques, top
candidates are compiled and qualified for external
confirmation.
6. Adaptive Weighting:
Output
from steps three, four and five are combined and measured against
backtesting results, rendering a dynamically weighted composite
score.
5. Descriptive
Ranking:
Proprietary blend of key equities data across the
spectrum of performance, fundamental and earnings criteria.
Descriptive scores focus on discrete data sets providing a backdrop
for assessing investment potential against specific normative
scores.
4. Normative
Ranking:
Composite indicators derived from backtested
methodologies and search strategies identify top prospects within
each investing style (Value, Growth, Momentum).
3. Market Reward
Coefficient:
Backtesting reveals those vital characteristics
garnering a market premium, and determines the adaptive weighting
process. Testing against key benchmarks allows continual tuning and
refinement of the stock selection process.
2. Market Cap Sort:
The
universe of equities is segmented by market cap to support analysis,
prospectus-specific investing styles, backtesting, and heightened
granularity.
1. Universe of Stocks:
All
American and some Canadian equities.