The StockRanks Jump Effect Webinar - the replay, a new study, and this month’s jumpers
Well - that was a great webinar session. Thank you to everyone who turned up for The StockRanks Jump Effect. It's been one of the deepest pieces of research we have run on the ranks: 5,902 jumps, twelve years, every delisted share included in the sample. If you were there, thanks for coming and for the questions. If you weren’t, this thread is where we can continue the conversation.
Two links to start with:
- Watch the replay: The StockRanks Jump Effect Webinar - plus the slide deck to download.
- Read the full study (PDF): The StockRanks Jump Effect Study - the long-form version, with findings, breakdowns, and the 90/80 studies all in one place.
But there's one thing I want to start with because it was the request that came up more than any other in the pre-webinar discussion:
You asked for a stock screen. We built it
Half of you were already doing this by hand - keeping your own weekend StockRank databases (DWit199), cobbling together “rank today versus rank last week” rules, and posting candidate stocks. It’s some of the best community detective work we’ve seen, and it slightly embarrassed us into action. So we built you some better tools.
There is now a set of Change in StockRank fields in the screener - measuring how the StockRank, and the Quality, Value and Momentum Ranks and their combinations, have moved over the last 1 day, 1 week or 30 days. You can screen on them, sort on them, and drop them into your tables, portfolios and watchlists as columns. The whole point of the study is that a jump is a trigger to go and research further - now you can find the triggers in one click. Full details and a how-to are in the product release notes.
Now, three insights from the study that I didn’t share in the original post - you can’t fit much in a single article - so here goes.
1. It’s a Quality story, rather than a Momentum one
This is a key finding - and several of you were already circling it in the last thread. When RWS and Synthomer jumped and then rolled straight back over, DWit199 put his finger on why: those were momentum-driven jumps, a price-and-sentiment pop with no real change in the business underneath.
The data somewhat agrees. When we pulled the jump apart into its ingredients and asked which factor was actually doing the work, the answer was fairly clean. It’s Quality. A 20-40 jump into a Quality Rank of 90+ beat its incumbents by a statistically significant +11.1%. Momentum jumps and Value jumps, on their own, carried a less reliable edge. And Value jumps were the worst of the three - they had the highest delisting rate in the entire study, 9% to 13% - a “Value jump” is can often bea share price falling, which mechanically makes the stock look cheap. That is the classic Value Trap, arriving dressed up as a Jump signal!
So the jumps worth your research time are often the ones powered by a genuine step-change in the quality of the business - usually due to new financial statement releases. Margins turning, cash flowing, returns on capital stepping up - not a share that has simply run up in price, and not one that has fallen until it looks cheap. That was is precisely the insight in iwright7’s excellent Dialight write-up on the last thread: a quality-and-momentum re-rate, and the honest question of whether the earnings leg actually follows - well funnily enough 2 days ago they said 2027's profits would be "ahead of expectations". Pair the jump with a story like that, and maybe you have something.
2. The exit is the hidden half of the rule
Richard van Woerden asked a very fair question last time: what exactly is a “first weekly close back below 80”? The simple answer is that for the simulation we read the StockRank at each Friday’s close, and the moment it finished a week below 80, we were out. Not an intra-week wobble, not a weekly average - the weekly close.
Why is that worth half the rule? Because when we tested it, the exit turned out to be where a startling amount of the return actually lives. Selling on the rank break (below 80) rather than on a fixed holding period - same buys, same stocks, same costs, the only difference being the sell discipline - compounded at about +16.5% a year net of real dealing costs, against roughly +13.5% for a plain twelve-month hold. That is around 3% a year just from using the ranks as a guide.
The reason is that a rank is adaptive and a fixed calendar is not. It lets a winner that keeps earning its place keep its slot - Yü Group held the top decile for a year while it ran up nearly sixfold - and it cuts a loser early, because the composite starts sliding through 80 before the price has done even more damage. We proved the mirror image separately, too - shares that fell 5 to 20 points below the line went on to underperform by 3% to 4%. The drops carry information just as the jumps do.
3. It is, brutally, a basket game
If you remember one chart, make it this one.
Across every qualifying jump held to its exit, 53% made money. But the mean return was +18.8% while the median was just +1.5%. Yes just 1.5%. The typical jumper does almost nothing - it’s a coin flip. The average is hauled upwards by a smaller number of monster runs - in names like Metals Exploration (LON:MTL), Ferrexpo (LON:FXPO) , Gulf Marine Services (LON:GMS) - or delisted stocks Best of the Best (remember its huge run in the pandemic?).
That is the whole strategy in a sentence: you do not make money because most of your jumpers work - you make money because a few of them go to the moon. Which is exactly why you cannot run this as a one or two-stock bet. You may well hold Carillions - it jumped a full year before it went to zero, and its -94% is sitting inside every number we quoted in the study. It’s best to own around 20 shares as a portfolio, taking new signals as they come, and letting the base rates do its work.
This month’s jumpers
Of course, I use StockRank Jumps as a signal for further research - not as a whole portfolio strategy - and that’s where I assume most of us will gain value. For example Kromek’s jump last year, it signalled to me that something significant happened and it promptly doubled.
So here is a fresh cut (taken a couple of days ago), pulled with the new screen (review how I did it here): UK shares whose QVM StockRank has surged above 90 on a move of 10 or more points in recent weeks. Bold market caps sit inside the sub-£350m band where the historic edge was strongest.
| Ticker | Mkt cap | QVM now | Jump (5-day) | Window |
|---|---|---|---|---|
| Hansa Investment (LON:HAN) | £644m | 100 | 70 → 100 (+30) | 7-14 Jul |
| IG Design (LON:IGR) | £82m | 100 | 69 → 94 (+25) | 17-24 Jun |
| Watches of Switzerland (LON:WOSG) | £1.77bn | 98 | 82 → 98 (+16) | 14-21 Jul |
| Castings (LON:CGS) | £147m | 97 | 85 → 97 (+12) | 16-23 Jun |
| CT Automotive (LON:CTA) | £32m | 97 | 78 → 92 (+14) | 20-27 Jun |
| Gear4music (HOLDINGS) (LON:G4M) | £58m | 96 | 85 → 97 (+12) | 20-27 Jun |
| Zegona Communications (LON:ZEG) | £3.39bn | 95 | 62 → 96 (+34) | 16-23 Jun |
| PayPoint (LON:PAY) | £367m | 95 | 72 → 94 (+22) | 16-23 Jun |
| Severfield (LON:SFR) | £112m | 95 | 72 → 91 (+19) | 1-8 Jul |
| Sosandar (LON:SOS) | £26m | 94 | 70 → 94 (+24) | 15-22 Jul |
| Fuller Smith & Turner (LON:FSTA) | £402m | 91 | 76 → 91 (+15) | 20-27 Jun |
| Volex (LON:VLX) | £959m | 91 | 81 → 92 (+11) | 25 Jun-2 Jul |
Drax (LON:DRX) | £2.62bn | 91 | 82 → 93 (+11) | 25 Jun-2 Jul |
| Northern Bear (LON:NTBR) | £15m | 90 | 78 → 90 (+12) | 15-22 Jul |
| Dialight (LON:DIA) | ↓ 89 | 64 → 90 (+26) | 20-27 Jun | |
| Amigo Resources (LON:AMGO) | ↓ 88 | 80 → 90 (+11) | 17-24 Jun |
A few honest notes before you dig in. Hansa is an investment company, and the study itself excludestrusts, so treat that one as a curiosity rather than a signal. Dialight and Amigo have already slipped back below 90. And the interesting question is never simply which shares jumped. It is which of them jumped for the right reason - a genuine quality inflection with a story underneath - and which are momentum pops that will fade the way RWS did.
Over to you
So that is what I would love this discussion thread to be. So here's a few questions for you:
- Which of the jumpers above has a real story underneath the rank - a margin inflection, a secular shift, a genuine turnaround - and which is just price?
- Did the webinar change your mind about anything? Confirm a hunch, or overturn one?
- And what should we test next? Yes I’d like to study Europe, but am also itching to do a fresh study into the StockRank Styles.
It’s the quality of the conversation down here that drives the research - the last thread alone sent me down a few rabbit holes I hadn't planned on. So let’s see where this all takes us.
Disclaimer
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79 comments
Results for week ending 14/8/2026 should anyone be interested
Results for week ending 7/8/2026 should anyone be interested
Conduit Holdings (LON:CRE) is top jumper and some is due to Q rising. I don't hold.
NWF (LON:NWF) has joined the list. However broker downgrades came through today so this will probably have an impact ?
The current list is quite interesting:
I hold Jet2 (LON:JET2) RWS Holdings (LON:RWS) Focusrite (LON:TUNE) and Churchill China (LON:CHH)
I can see you’re using 30 day although the results were based on 7 day jump of 10. Ed, any chance of seeing what the results were when using 30 day jump?
A new entry on Stockrank Jump today is Synthomer (LON:SYNT) and on Valuerank Jump CT Automotive (LON:CTA)
But Ed's screen is based on 30 days.
Synthomer (LON:SYNT) SR is up but Q is down.
Hi Rusty, I was taking 7 day jump as being the driver as it states in the ebook that a jump takes place within a single week.
Hi Barbara, Stockopedia writers have been pretty negative on Synthomer (LON:SYNT), it will be interesting to see how this plays out.
Dear Ed, As always, you give us plenty of material to digest and you continuously keep us thinking and looking for better ideas to increase our returns. Your 18.1% return since inception is very impressive, even if it does mean more work from our side and naturally higher costs and wider spreads to deal with. Your top VM rank (under top stock ranks) since inception shows an 18.61% return, equally striking, and of course that would include larger‑cap stocks, making life at our end easier when it comes to trading. You also mentioned that if you had started the NAPS portfolio on a VM basis, the returns would have been better than the QVM portfolio. Logically, therefore, a portfolio of 20 stocks, traded once a year on a VM basis, would provide better returns, less hassle, and cheaper costs. If I’ve misquoted you, I apologise — but I wanted to pick your thoughts. Tim
Does James Cropper (LON:CRPR) qualify this morning ? I'm terrible at screening:)
Yes jumped 11 to 96
Only 3 according to Stocko.
It’s weekly jump was 11
Oh weekly, l see.
"Does James Cropper (LON:CRPR) qualify this morning ?"
Yes, it appears that way but there is a catch. The final James Cropper (LON:CRPR) results were announced on15 July but Stockopedia was still showing a ttm column in the StockReport as late as 25 July. The stockopedia stockreport and hence ranks were not updated until the week ending 1 Aug. The StockRank prior to results was 93 and once Stockopedia updated its systems, at least 10 days after the results were announced, the Stockrank was 96, so not really a jump at all.
This delay is another example of the inadequacy of the Stockopedia data supplier when it comes to timely updates.
Thanks for a really helpful session!
I have a quick question please - I have built a NAPS portfolio bases on the guidance published. I started this portfolio in February just before the Iran conflict, so as you might imagine, performance hasn't been great so far- I'm up about 3% ish.
I noted the '90/80' discussion, and was interested to hear about possibly selling stocks that dip below 80 on the overall Stocko rank. I have CMC Markets (LON:CMCX) in my NAPS portfolio, a stock that now has a 76 rating. Using this 'rule' I might look to sell based upon this, but this seems arguably hasty given its strong performance in June? Any advice perhaps on further filters, or, based on this, would you look to sell and replace with another 90+ stock in its place?
Furthermore please, if I was to replace a stock that dropped below 80, any thoughts on how long to hold for - i.e. for 12 months, of until the end of the 12 month period from when the NAPS portfolio was first set up (which could lead to a considerably shorter holding period!).
Sorry for all the questions, it's my first year running a NAPS-style portfolio so I really wanted to get the thoughts of others.
Hi Adam,
The main point of NAPS is do nothing for 12 months, i.e. No Admin Portfolio. If you follow that rule is up to you of course... so you might sell CMC Markets (LON:CMCX) in accordance with the 90/80 rule, but this is no longer NAPS.
Following on, if you do decide to implement a 90/80 rule in NAPS, then presumably the holding period for all stocks in the portfolio will be determined on their StockRank movements and not a preset 12 months, an APS portfolio then!
Ultimately, I think, there is no right or wrong, only what works for you, your risk appetite, time frame, etc.
Good luck with it, whatever you decide
I've recently moved over to a 90/80 method and I'm enjoying it. Gives a bit more to look at/feel like I'm doing something than NAPS. For stocks that dip below at week-end I'm just applying a relatively tight stop-loss to to ride out the last of the momentum.
Pschologically this helps me keep to the plan which for me, is the most important - a plan is only as good as your ability to stick with it.
Exiting under SR 80, what is then your Turnover per year, compared to a pure NAPS ? Are you turning 100% over 12 months, or something similar ?
Far too early to tell regarding turnover I'm afraid. Been doing it since March and nothing has dropped below SR80. Plan is to just run each stock until it hits SR80 or a profit warning then replace it. Outside of some event driven markets causing a flurry of triggered sales I'd anticipate turnover to be 10-15% higher than NAPS - just have to see how it goes I guess!
Man (LON:EMG) big jump in sr today note how quickly its sr has changed as big cap since its results yesterday v small caps results. Its a weakness in data uploading for small caps hence the delay. On small cap results i ask myself will the sr increase now so to get in b4 stockopedia update. Take Nichols (LON:NICL) results today big upgrade to SR i expect on value rank, quality already 93.
That is some jump.
The rise is fairly even across Q, V and M.
Stocko writers have been a bit negative on it in the past, pity it was not covered yesterday.
Anyone following this research by Ed and Co might like a look at Warpaint W7L . A value metric of 74 even after a recent rise and profit taking and momentum of only 40. Quality 79 and stock rank of 72 and rising. I think the market is waking up to this with its yield of over 6% as well.
Thanks, i am involved in stock market research, so i know how much work is involved in an investigation of this scale. Many weekends!
I think the conclusion from 50 years of work is that most company stock returns are poor, but a few are stellar. The paper every investor should read is:
Which U.S. Stocks Generated the Highest Long-Term Returns? by Hendrik Bessembinder :: SSRN
For the vast majority it is best to buy an index tracker which casts a very wide net, so you have at least something invested in these monsters.
A brave few attempt to catch them through other means. Ed's stock rank jump being one of them.
The gist of the report is that a jump from average to high quality is a good way of identifying a monster. Rolls Royce plc being a prime example.
I think his results are connected to the strong returns from buying firms that announce 'ahead of expectations'. Which is the flip side of the poor results from holding after a profit warning, i.e. below expectations.
Quality and momentum are the indicators, so we need to drill down a bit further.
The quality rank has three components:
I suspect the first two are doing the work because trend is a long term thing not subject to jumps.
The momentum rank has two components:
Both are useful but in terms of the jumps i suspect an upgrade to earnings estimates is the best sign of a future monster.
I would very much welcome a 'monster rank' which combines profitability, financial safety and earnings momentum. A jump in this rank would be an easy way to identify firms which deserve detailed investigation and perhaps investment.
I always had one issue with Hendrik Bessembinder's research was that he was analysing shares held permanently. In other words, a buy-and-hold strategy with no sell - the only sell being delisting.
The truth in investing is that value and momentum are both premiums that can only be earned by active buying and selling.
i.e. they are time-bound phenomena - and require a dynamic, active approach to earn the reweards.
Using rules-based approaches to the stock market allows you to earn those premiums. The NAPS being a classic example. This piece I wrote illustrates how many of the biggest multi-baggers for the NAPs portfolio ended up losing most of their gains in the years after they were sold.
Identifying multi-baggers that can be held for the very long term is more an art than a science, I think. The big 10 Year Multibagger research we did on this in the past showed that the best indicator of whether you should continue to hold a share for the long term is a combination of:
A monster rank would be wonderful!
Thanks, the point you make is very true.
Thanks for the interesting insight and agree with your thinking.. Just for my understanding, my instant reaction was my assumption that the 5 components you mention could be captured via the Q & M ranks as you alluded to . I thought earnings estimates (upgrades) was included in the M rank. Is this not the case?
There's always going to be a lag in the analysis.
Accounts produced -> hard evidence of fundamentals like margin, ROCE, etc. that can be directly plugged into Quality Rank as soon as they are published by the company.
Several days later, maybe, an analyst studies the results, ponders the wider sector pressures, the wider market, puts a finger in the air and estimates EPS for FY1 & FY2. These are then published and eventually are synthesised by Stockopedia into the EPS estimates analysts data and then that is fed into Momentum Rank.
But there is that delay, plus it's relies on there being an analyst covering the stock in the first place.
The jump in QualityRank is the earliest indicator that things have improved in the way the business is being run.
I would argue:
but if a stock is thinly covered by analysts you might not get the EPS confirmation
Yes, i agree with your points.
The key i think is trying to get in as soon as possible. I am struck by how similar this is to the Zulu screen, which has its origins in the 1960's. The top performer out of dozens of screens, with an annual return of about 19% CAGR.
The description for the Zulu screen is given below:
Jim Slater Zulu Principle is a growth investing strategy inspired by UK investor Jim Slater in his book, The Zulu Principle. The strategy combines growth, value, quality and momentum factors. Its most famous ratio is the price-earnings-growth factor (PEG) which compares a company's forecast price-to-earnings ratio with its forecast earnings-per-share growth rate. It also looks for a high return on capital employed and positive relative price strength in small and mid-cap shares. Jim Slater wrote: "Most leading brokers cannot spare the time and money to research smaller stocks. You are therefore more likely to find a bargain in this relatively under-exploited area of the stock market."
Great webinar Ed
As the mkt cap for the jumpers is typically small cap companies I think it would be beneficial if the companies results were updated quicker into the Stock ranks. You mentioned that it's typically the Quality rank jump that delivers the best results but the Qulaity rank only really jumps on results. I'm a small cap investor and typically on average have to wait for just over a week for the results to be reflected in the ranks, so stating that the ranks are updated daily is actually a bit misleading when it comes to the Quality rank because the reason for the quality rank change is over a week old.
My question is can the companies results be reflected into the ranks on a more timely basis as the upside could then be even greater.
Jumps are useful - but I do need to reiterate the 53% win-rate point raised in the study - this is actually below the average we've found for 90+ stocks as a whole. So it's easy to over-weight noise in Jumps. The key driver of the Jumps strategies are that it does seem to identify new potential "monster stocks" that the stock market may have missed. But those are rare... any "strategy" that uses jumps needs the return skew from finding those big winners.
The NAPS has averaged about a 57% win-rate. This year there are 11 winners and 9 losers - but it's up 22% year to date - due to CMC Markets (LON:CMCX) +140%, Ramsdens Holdings (LON:RFX) +78% and Seplat Energy (LON:SEPL) +96% amongst others performing very well.
But of course, the NAPS is passive, and uses no jumps at all. And it doesn't bake in any longer-holding period mechanics - which a 90/80 or 90/70 rule has the flex to do.
I think the more important question in investing to answer is "what's the best strategy that fits your psychology, time-availability, liquidity preference, portfolio size, drawdown tolerance and more?" - that's a much bigger topic of course, but one we will be leaning into a lot more in our content by the end of the year and through 2027.
How long does a jump remain valid?
If a stock jumped 3 weeks ago and is currently a similar rank to one that jumped this week, which would you pick? When would it no longer be a jumper but an incumbent?
According to my modelling, the returns are front loaded and decay from the first month down... but of course, if you were to trade short term, the costs eat all the returns. The optimal holding period seems to be 10 months if you take costs into account.
That's interesting. I have less data than you but in my own study the jumps suffered a setback in the first few weeks then went on to outperform. Numbers are quite low so chance could be having an impact. These returns are relative to the average of the entire investment universe over the same period, so true "abnormal returns".
ECO Animal Health (LON:EAH) SR jumped on Friday but was it due to a spurious post trading close in the price. The price shot to 101p post which has since dropped back to 93p. This cause the MR to go up +28. Was it real or a manipulation of the price?
Note the volume on ECO Animal Health (LON:EAH) has been high recently which may be a genuine reason the for the MR change.
There was a few of those on Friday Property Franchise (LON:TPFG) and Quartix Technologies (LON:QTX) both down 10% this morning.
Surely it's irrelevant what the price moves are on any given day? The data is based on the price up to 12 months after the jump.
If the price change makes the initial jump it is relevant.
l'm seeing lots of strange price changes at the moment.
A 10% price change on the first day is very relevant, considering we are talking about 12-15% price gain, over 12 months.
Agreed, especially if the price is down on the day, but worrying if up a lot already. LOL
The SR jumped before the open / during the day on Friday please Revs8 ... i.e. before the spurious close... and whilst I'm here, very many thanks indeed for your generous contributions..
Thank you Ed and the team for a great piece of research. Very much appreciated and personally this certainly adds value to my subscription.
In the webinar I did pick up that under the current rules, investors may miss out on the earlier stock rises and coupled with the observations from others, quality seems to be a particular driver and something to hone in on !
For the purpose of giving me an edge in identifying early risers through a data driven process, I am experimenting with a few quality focused screens starting with a SR of 85 but only screening for quality jumps of 10 but adjusting the table view to take into consideration momentum and value factors.
In my head, your rules are for the Premiership clubs and my quality screening is looking at the top half of the Championship with a good chance of the play offs!
Thank you for the inspiration to change my investment thinking
A couple of significant takeaways that I have are:
When the stock rank jumps:-
1. It is on old news. Sometimes the news that caused the jump is days old. Therefore it is not a trading signal. The market already has the news and is therefore ahead of the ranks.
2. Almost 50% of back- tested stocks don’t see any performance gain over the stocks that are already have a SR of 90+ however some of the stocks are setting up to become huge winners.
3. As idwright surmises below, Quality changes are the most important signals. The market appears to be slower to assimilate these (or the SR’s are responding to changes in price (M and V factors) so you have already missed the move).
I’ve been wanting this facility for some time and I believe there is alpha to be found in some of the SR changes but not all of them. Therefore I see this new facility as a way of adding to my watchlist. It’s not an instant “buy” signal, further research is always needed.
Happy hunting.
So a +10 jump in the QR is more of a buy signal than a jump in the overall SR?
Maybe? One for Ed. QR v SR.
If the SR jumps +10 to SR 90+, due to QR rise mainly is better than from MR and VR rise.
Yes Rusty I hope Ed picks this up. The strategy of SR jump seems to have thrown up more questions than answers. Does a QR jump from a low score have the same effect as a jump into 90+.
I think you need to look deeply into why the ranks changed. VR could change due to a price drop or due to a change in fundamentals. Momentum could change simply because the price surged or because of sudden increase in volume.
The changes I find most interesting are sudden changes not due to obvious price moves. makes me wonder if the market is not pricing in the change yet.
I find this new filter to be very positive/interesting. I wonder if small cap prices could be affected by it given that many people may use it as a buy signal.
UK small caps are so illiquid now, even trades under £1,000 can move the prices.
Anecdotally, I believe this may be the case but I don't have any evidence just observations.
However, as previously shown, positive news leads to more positive news. So whilst we may miss the first move (which caused the ranks to jump) there are often more to come.
I've seen many comments that state that the SR jumped then the share price fell. This is because the jump is not a trading signal IMO (you've already missed that move in most cases and probably seeing profit taking). Its the next 9 months that the price will rise.
Excellent study, webinar and report! Based on the findings, should we not mainly screen for a jump in the QR instead of the full stock rank? This seemed to have made all the heavy lifting, so why even look at overall SR jump? Ie screen for QR jump since 1 week +10-40?
And sorry if it has been mentioned, I only saw reference to an US backtest - but presumably this effect should hold for European stocks as well?
Thank you!
Many thanks for the excellent Webinar, I'm now only now starting to appreciate Stockopedia again as I’m currently looking for new employment. I’ve been a Jim Slater advocate from my early days of investing and the Jump stocks seem to bear his fruits. Anyway, I’m trying to put things together – for progression. The previous Stockopedia tables on the ‘jump stocks’ subject are a little dis-jointed - so Im asking ‘could we have tables which show or are similar to: -
ETC:- ( not finalised)
I know that this is hard work – but I’m sure every little helps! Or Can I do this already?
This is how I`ve modified the screen. I also add the quality etc rank changes so I can see what is causing the change.
Thanks. With so few stocks meeting the criteria the time frame for building 20 positions is likely to be months.
If you get 1 or 2 a week, then will soon build up to 20.
If you want 20 now then you can look at NAPs.
For info, I have run the following this morning.
StockRank™ >= 90 Mkt Cap GBP > 50m StockRank™ Change 1 week > 10
QM Rank Change 1 week > 10 Sector not in "Financials" or "Energy"
The only qualifying UK stock is ECO Animal Health (LON:EAH).
There are 11 EU stocks ranging from Hexpol AB (STO:HPOL B) B to Shearwater (LON:SWG) on Mkt Cap.
Aegean Airlines SA (ATH:AEGN) is Contrarian, all others on the list are Super Stocks.
Unlike Sosandar (LON:SOS) I mentioned in an earlier post, the trading information where shown is ‘sensible’ with the highest spread below 350bps.
I have now watched the webinar and read the e-book. Both excellent and thought provoking. I have a few questions that I am hoping someone can answer.
1. Does the SR jump effect require a 10 + jump in the QR as well as the SR?
2. Should a QR of say 80 or more be added to achieve the best performance or do lower QR rankings still work?
3. Applying the rules today 25/7 (SR90+, SR change of 10 or more and less than 40 over the last 30 days. mkt cap under 350m. QR 80+) generates only 3 results: SThree (LON:STEM) , Somero Enterprises (LON:SOM) , Sosandar (LON:SOS. Eliminating SOS due to its wide spread you are left with 2 to add to a portfolio. It would seem that to create a portfolio of 20 holdings could take a long time. Am I understanding this correctly?
As I read it the effect you are looking for is over 1 week not 30 days (shouldnt the screen be over 1 week not 30 days). So none of those strictly qualify- Somero is up 8 over last week. SThree is up 4, and Sosandar is down 2. The only share I have qualifying over 1 week is ECO Animal House up 12. Morgan Sindall also qualifies if you remove the max market capitalisation criteria. There is no criteria as far as I`m aware of a Quality Rank over 80. But maybe there should be as it would have kept you out of Amigo Resources which has so far fallen 40% since it triggered on 24th June. This share still has a stock rank of over 80- hopefully its an anomaly. Amigo Resources quality rank rose around 21 points to 40 on 25th June, so rising quality didnt work in this case but it was still below average quality when the jump triggered.
Yes you are right and thanks for your reply. The screen is on a 1 week timeframe. Adding a QR rule I feel would be prudent.
I haven't watched the webinar yet but just reading at this post I do wonder how it would perform if the StockRank Jump principle is applied to the NAPS portfolio. Probably not as an entry rule but as a rebalancing tool. Buy the top StockRanks for each sector following the NAPS rule but instead of holding for 12 months every stock, hold until the StockRank creeps down to under 80 and replace with the top StockRank from the same sector or after the 12 months if that hasn't happen. That would required to perhaps leave some cash in the sidelines similar to the SIF portfolio from Roland.
I may have a go to this approach on my ISA NAPS and leave the SIPP running my own default version.
A few of these have fallen in share price, such as Castings (LON:CGS) down about 9%, last 2 days. Amigo Resources (LON:AMGO) was down 6% yesterday. Morgan Sindall (LON:MGNS) down 5% yesterday.
And rankings fallen, some already mentioned in the article above.
Northern Bear (LON:NTBR) is down to 86.
If Quality is key, maybe should have that change, in a column as well?
IG Design (LON:IGR) value +26, Q only +4.
The big quality jumpers in the last month are Watches of Switzerland (LON:WOSG) +34 and Sosandar (LON:SOS) +43.
Watches of Switzerland (LON:WOSG) shares are down about 12% recently, maybe a good buying point?
Castings (LON:CGS) was ex div on thursday
A good point but still fell again yesterday. Some weird price movements lately on no news.
I'm only a very recent joiner and have found Stockopedia to be extremely useful but possibly a bit overwhelming in terms of the sheer volume of information it provides. Just looking at these jumpers and the comments below re quality, I noticed that Gear4music (HOLDINGS) (LON:G4M) over the last 30 days, has fallen 10 points in quality (from 94 to 84) , risen 31 in terms of value (currently 90), fallen 8 points in momentum (now 59) but has moved from 90 to 94 in its overall StockRank. The share price target is stated as 49% above its current price and it qualifies for the Bold Earnings Revisions Screen. To me, all this appears to be contradictory but if anyone has any thoughts on how this could be interpreted or how the database works, it would be very much appreciated. Cheers
Smith & Nephew (LON:SN.) has jumped 19 points this week - presumably this is a good time to make a position?
It's only jumped to 69 though so I'd say it doesn't fit this system. Yet anyway.
Hi Ethan,
The jump needs to take the stock rank into the 90's ideally, whilst Smith and Nephew's stock rank is currently 69, so I don't believe it would qualify under these criteria.
Best
Richard
Ed - You ask if a hunch was confirmed - yes, I have for a long time thought that the Quality rank was the most important. This is my portfolio of 25 shares (shown equal weighted). YTD it is up 13.2% cf ASX 6.9%. (The one in the red is a distribution of shares of the ex-subsid. of another company worth less that the cost of selling. The one half in the red is Whitbread (LON:WTB) that I have held for decades for income). The two in the white zone with QR<50 are Lloyds Banking (LON:LLOY) held since Halifax B. S. demutualisation and Checkit (LON:CKT) held as part of the break-up of Electron and at long last heading for breakeven!
Thanks for the research. I have a few questions/clarifications. Firstly you mention at one point a minimum market capitalisation of 10m. Yet your screen here only shows market cap less than 350m. For the research did you include shares with a market cap below 10m, or is the lowest market cap bracket 10-50m. For me (and I`m sure I`m not the only person) buying shares below 50m market capitalisation is quite a leap, but below 10 million will be too much. Secondly in your research paper you show the results for the jump effect for different market caps for QVM>80. Yet you advice trading QVM>90 so what were the results per market cap for this. Finally do you have any idea what percentage of the jump effects are due to a share beating expectations at its trading update or results announcement. Is it possible to buy on the day the share beat expectations, and use the stock rank jump as a confirming signal ie to run on the Stock Rank 90/80 system. Finally is there any chance we can see more of the 2000 90+ results, even if it was just a list of the qualifying shares and when. I`m interested in the quality jumps you describe, but would like to assess this and how the chart reacts. I can look at the chart on the stock report chart but it would save time if you could reference this. Also the full results is the only way I guess you can identify shares which have delisted.
Ed
Enjoyed the webinar and will incorporate parts into my screens. I do have some reservations from a practical view in trading small/micro caps and hoping that one ‘outlier’ will drag the portfolio performance to acceptable levels.
Looking at Sosandar (LON:SOS) which was the only UK stock in your last screen:
SP now 12p Spread 833bps EMS 30,000 Beta 2.064 Volatility 67.38%
For a £100k portfolio at £5k per stock you need at least 40k shares for a position. That implies at least 2 trades to buy if you can stomach the other figures. If the shares take a tumble you are again talking 2 trades to get out ….. but at what level …. if you can.
I wouldn’t consider Sosandar (LON:SOS) ……. and that could be the outlier.
So too much of a risk for aging me ……….. 'll look at jumps in other stocks.
I'm with you on this one, high spread low cost shares just make me nervous. I tend to put a 400 spread in all my screens. I'll break the rule once a year on the NAPS, but that's about it.
This is phenomenal! I thought I was the only one who'd thought of this.
Great to get it integrated into the product because it was impossible for me to check it myself before
i d like screens to offer a date stamp, so in effect a bit more hands on modelling can take place. It s nice to be fed the data streams and selected studies
I just added a new column to my portfolios; "Stockrank Change over the previous month". I was surprised to see MS International (LON:MSI) MSI pop up in one small portfolio with a +26 move. This stock doesn't attract a high SR overall but the increase is driven by a surge in quality. It will be interesting to see how it progresses as the business is in, I believe, a transition phase.
I'm also screening for stock rank movers globally as I subscribe for near global coverage with Stocko'. There are hidden gems out there as previous searches have winked out some great companies. My experience has generally been good, picking a small number of foreign stocks (although avoiding the US at present) using a combo of strong SR and Phil's "Grow Your Dough" screen with a value tilt applied.
Ed, Many thanks for the Dialight (LON:DIA) "hat tip." A few thoughts on the excellent analysis you guys have done.
Factor jump (+20-40 into 90+)
12m mean
Edge
Quality
+18.1%
+11.1%
Momentum
+12.7%
+2.3%
Value
+14.2%
+2.0%
The Quality Rank edge is roughly 5x Momentum's and Value's. So it's the Quality component doing most of the hard work. A significant StockRank Jump may implicitly be a Quality-inflection detector!
Tellingly, high Quality Rank incumbents (stocks already sitting at 90+) were the weakest cohort in the whole study at just +7.1% — while Quality Rank arrivals were the strongest at +18.1%. That's the real tell: The market is slow to price the moment quality changes. In addition:
"The market is too slow to price the moment quality changes". What a super quote.
Looking back at SThree (LON:STEM). The stock rank jumped to >90 at the end of January following the finals, and the jump was driven primarily by the Quality rank. Yet the share price went nowhere for 5 months, despite the stock rank remaining above 80. Now of course the share price appears to have taken off as a result of a change in sentiment towards the sector.
Good spot with the Stem (NYQ:STEM) 5M delay, Steve — and thanks for flagging it. There's some recent Chinese research suggesting Quality Jumps positively predict stock returns, but only translate into excess returns once market sentiment turns — without it, the effect can be statistically zero.
Market sentiment timing may be partly responsible for Ed's Stockrank Jump numbers showing a modest 53% "win" rate. Most of the money comes from a handful of monster runners, not the typical jumper, highlighting the need for a basket of Jump stocks.
Great Webinar, really enjoyed it. The clarification on momentum makes sense. When do you update the end of week rank, is it in the early hours of Saturday, or the early hours of Monday?
Educational! I need to read a lot more but I'm using the QVM and stock rank before the buy button all the time now. Thank you Ed.
I am under the impression that you have recently said that you are 82 years old. If it’s not you I do apologise.
I admire and respect people that are willing to learn all the time. The stock market is an endless classroom and this is how I have created my wealth.
People who refuse to accept and learn how the stock market actually works fail. It’s all about money management at the end of the day, stock picking is the easy part!
All the best