Based on our extensive research and back-testing, VI Score is tuned based on factors that contributed most to a stock’s potential for share price appreciation over the next 3-5 years.
These are broadly categorised into growth, profitability, health, price momentum and risk.
Why and how does price momentum factor into VI SCORE?
Price momentum can be looked at from both short and long-term.
Although we do not promote technical analysis, we believe that given the advancement in technology and information flow, the market is usually correct in its valuation on a company, especially over the long term.
While the market can exhibit signs of greed or fear in the short term, if a company’s share price has not performed well or are persistently undervalued for an extended period, there are likely fundamental issues like risk of aggressive accounting, regulatory risk etc. that the market has priced in.
Given that VI SCORE factors in a company’s share price movement, how often is the VI SCORE updated?
As the factors in VI Score are longer-term in nature, this feature is considered a non-price sensitive feature and is only updated weekly or whenever a financial report is released.
How should users pair VI SCORE with the VI LINE Valuation module in order to maximise their potential returns?
VI Score is tuned for share price appreciation alone. It needs to be used together with VI Star Chart's animal type when screening for quality companies, and VI Line when deciding to enter the position.
For example, when we screen purely by VI Score, we get a mix of all various animal types, each of which carries a different risk profile and type of company.
How should VI SCORES be interpreted? Is there a way to band the companies scored?
As a VI Score is a probabilistic ranking algorithm, we won't define any "sure win" bands because nothing is for certain...
But here's a rough guide:
? 0-50 = look elsewhere (occasionally, algorithms have their limitations too and you might find mis-scored ones. But generally, we would avoid this pile unless we've done our due diligence and are absolutely sure we want to go for it).
✅ 51-70 = okay (not the best.)
? 71-100 = best of the lot, especially at the higher ranges of this band.