Here at Stockopedia we’ve built a community around a stubborn, evidence-backed idea - that good quality, moderately valued, trending shares - the kinds that carry a high StockRank - have a powerful tendency to beat the market. Since launch, UK shares sitting in the top StockRank decile (a rank of 90 or more) have returned about 12% a year on average before dividends. And we've shown with strategies like the NAPS portfolio that there are simple, rules-based ways to capture that kind of return without staring at the screen all day.
But one question crops up again and again. If a high StockRank is good, is a sudden jump into the top ranks good too - or have you already missed the move by the time the rank catches up?
I’m going to answer that properly in a full webinar on 23rd July (do sign up here) - it’s the deepest piece of research we’ve done on the subject - so please do join. But in the interim, I couldn’t resist giving you a sneak preview, with a list of some recent jumpers as examples to think through.
90+ jumpers do seem to have an edge
We measured every time a UK share’s QVM StockRank jumped across a 90+ threshold in a single week, going back more than a decade - thousands of events, including all the (very many) delisted and dead companies kept in the study so nothing flatters the numbers.
The headline is that the average share that jumped 10 to 20 points to a StockRank of 90 or above went on to return about +15.9% over the following twelve months, against +10.7% for the shares that were already in the cohort. That is a +5.3% edge simply by arriving newly into the 90-100 zone. Bigger jumps, up to around 40 points, did even better still.
Beyond this, when we tested the 90/80 rule - i.e. buy the jump into 90, and sell on the first weekly close back below 80 - it compounded at roughly +18% a year, net of our best measure of dealing costs (spread, stamp, commission). The 90/80 edge comes from holding the big winners longer rather than selling on a 1 year clock.
Three caveats up front, as I need to be honest:
- It’s a basket effect. The win rates are…
