May 31, 2019

What are Combined Ranks and how can they be used?



At Obermatt, we generally use three financial facts for our rankings - Value, Growth, and Safety. With that we are confronted with a small problem: It is impossible to sort by three different criteria at the same time to create a Top 10 Ranking List. That's exactly why we developed the Combined Rank at Obermatt. Here is how it’s calculated.

The basis for our analyses is the aforementioned Value Rank, Growth Rank, and Safety Rank. In the next step, an average is calculated from these ranks. The same average is also calculated for all other comparable stocks. These averages are then compared. The company with the lowest average is assigned the lowest Combined Rank, i.e. 1. Conversely, the company with the best average is assigned the highest Combined Rank, i.e. 100.

Thanks to this method, we can create Top 10 Lists at Obermatt. Premium subscribers get even more. For premium subscribers, we calculate monthly personal Top 10 Lists based on the Combined Ranks and their personal investment needs.

When I’m looking for new stocks myself, I proceed as follows: First, I sort all the stocks that are relevant to me according to their Combined Ranks. Then I look at the Value Rank. This prevents me from buying overpriced stocks. Next, I turn to the Safety Rank. It allows me to assess how risky - in other words, how indebted - a company is. Finally, I look at the Growth Rank, as well as the company itself. In addition to the basic information about the company's structure and history, my focus is finally on the news. What are the latest events around this company?

All this together creates my body of knowledge for picking stock investments. Now you know how I use the Obermatt Ranks for my investment decisions. A lot of success with your own decisions!



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