When picking there are examples of high quality shares with Stock Ranks >90 but Quick Ratio's < 1 (assets don't cover liabilities) or PEG > 1 (suggesting overpriced).
Examples - Epwin, Taylor Wimpey, Redrow, Billington, Steppe Cement.
Should the Quick Ratio and PEG be ignored in these cases?
Any ratio or rank gives a guideline as to the balance of probabilities. The way I look at it is if you buy a basket of shares with particular characteristics you try to weight probability to a positive outcome. The StockRanks >90 on balance tilt individual outcomes towards the positive. If you can layer in additional criteria you might improve the odds; you will reduce the universe. Reduce it too far and you move towards stock picking which some people do well. An alternative strategy is farming where you play the odds and try to have sufficient high probability shares to ensure an overall positive portfolio outcome; layering in too many additional criteria can prevent sufficient candidates.
You may well be right. Trying to pick stocks where everything looks perfect is like searching for The Grail. I noticed that Ed Croft's NAP/Top 2020 Stocks contain some with less attractive features like Quick Ratios < 1 (ENQ, POG) and Earnings Manipulation Risk (RRE) but they may still outperform.
All metrics in the public domain are used to form a consensus on the price by a large pool of professional analysts. It is unlikely that any single metric is a better predictor of performance than any other, especially when taken in isolation.
