There are a lot of reasons our subscribers choose Obermatt, and one of them doesn't always show up right away. Most research in this industry looks at a company's numbers on their own terms: this quarter's profit, this year's growth, this stock's return. We built Obermatt around a different starting point. A number only tells you something once you put it next to the peers a company is actually competing against, and we think that single shift changes almost everything about how you should read a stock. That's relative stock performance in its simplest form, and it's the foundation of how we rank every stock on Obermatt.
Here's a small example of why. A company's profit falls 10%. On its own, that sounds like a warning sign. Sell, right?
Now add one detail: every one of its competitors fell 30% that same year. Suddenly a 10% decline looks like the best-run business in the room. Same number, opposite conclusion. Nothing about the company changed between those two sentences. What changed was the context.
This is the problem with absolute numbers in investing. They tell you what happened, but not whether it was good.
Why Absolute Numbers Paint an Incomplete Picture
Look at almost any metric investors rely on: profit growth, revenue growth, stock returns, P/E ratios. All of them move with the overall market mood as much as with the company itself.
In a strong bull market, mediocre companies post double-digit growth and look brilliant. In a downturn, well-run companies post declines and look like disasters. If you only look at the absolute number, you are really just measuring the weather, not the company standing in it. Relative performance strips the weather out and shows you the company on its own merits.
We saw this exact problem when Obermatt started. The original business, back in 2008, measured company performance to set fair executive bonus targets. Then the financial crisis hit, and fixed targets set a year earlier became meaningless overnight. Revenue and profit swung wildly, and nobody could tell if a manager had done a good job or simply gotten lucky, or unlucky, with the market cycle. The fix was to stop asking "did the number go up or down" and start asking "how did this company do compared to its true peers, facing the exact same conditions." That question turned out to work just as well for picking stocks as it did for setting bonuses, and it is still the foundation of every Obermatt Rank today.
What is a Stock Market Grading Curve?
Here is a simple way to picture it. A student scores 65% on an exam. Looks mediocre. But if the class average was 40%, that 65% puts them near the top of the class.
Percentile ranks of stocks work the same way. An Obermatt Rank of 75 in any category means the company outperforms 75% of its true peers on that specific metric, nothing more and nothing less. You are not grading the company against an arbitrary pass mark. You are grading it against the field it actually competes in.
That "true peers" part matters more than people assume. A software company and a pharmaceutical company might be similar in size and even sit in the same index, but they operate under completely different economics, regulation, and growth expectations. Comparing them directly tells you almost nothing. Comparing each one to its actual competitors tells you a lot. This is what real peer comparison looks like: matching a company against the competitors that actually shape its world.
When Falling Profits Are Still the Best in the Group
I follow the automotive industry closely, partly for the engineering, partly out of habit. Every quarter, carmakers report delivery numbers, and headlines love a single figure: "Deliveries up 12%." On its own, that number is essentially useless. Growth of 12%, while competitors grew up to 25%, is a company losing ground. Growth of 12%, while the segment shrank, is a company gaining share in a difficult market. The absolute figure didn't change. The context determines the actual story to be told.
Take Volkswagen. In the first half of 2026 its operating result fell 12%, and it cut its revenue forecast for the year. Read that on its own and you would assume the Obermatt ranks must look terrible. They don't. Volkswagen's Profits Growth Rank is 100, the highest possible score, meaning it did better on profit growth than every single one of the fifty companies it gets compared to. That list includes BMW, Mercedes-Benz, Renault, Stellantis and big suppliers like Continental, Michelin and Valeo. All of them were dealing with the same two problems at once, US tariffs and the Chinese demand moving away from European brands and switching to Chinese brands, and all of them had a rough six months. Volkswagen simply had the least bad one. The typical company in that group scored 61. A 12% decline sounds like failure until you see that the alternatives did even worse.
Where the 360° View Rank Comes In
This is exactly why Obermatt built the 360° View Rank the way it did. Instead of leaving you to check Value, Growth, Safety, and Sentiment separately and guess how they balance out, it consolidates all four into a single peer-relative score. A high 360° View Rank means a company is holding up well against its true competitors across the board, not just on the one metric that happens to be trending in the headlines that week. In short, it's peer-relative stock ranking distilled into one number.
None of this means peer-relative ranks are a crystal ball. A low Sentiment Rank can simply mean the market hasn't caught on yet. A high Growth Rank can fade fast if the whole peer group is about to slow down together. But at least you're comparing like with like, in good markets and bad ones, instead of asking whether a single number went up or down and hoping that's the whole story.
Next time a headline number looks great, or looks terrible, the first question worth asking isn't "is this good?" It's "good compared to what?"
Learn More
Curious how peer-relative ranks work in practice? Explore the Obermatt Method and the 360° View Rank in detail.