Our Methodology

9 proprietary ratings. 25 years of validation. One mission: measure what Wall Street won't measure—the statistical probability and magnitude of stock price changes.

The Science Behind Our Ratings

Every rating we produce is built on a simple premise: the relationship between a stock's price and its underlying value is measurable. When that relationship becomes distorted, the probability of future price change increases.

We don't predict prices. We measure probabilities. There's a profound difference. When we rate a stock "F", we're not saying it will fall—we're saying historical data across thousands of similar situations shows an elevated probability and magnitude of loss.

"The price is not what's material—it's the relationship between price and the underlying value of the company. When that relationship distorts beyond historical norms, we can measure the probability it will correct."

— Ray Mullaney, Founder

What Makes Our Approach Different

We Measure, Not Predict

Our ratings quantify statistical probability based on historical patterns across decades of data—not analyst opinions about future events.

Zero Conflicts

No investment banking fees. No advertising revenue from funds. Our only business is selling ratings that work.

Full Disclosure

We publish our validation methodology and results. We welcome third-party audits. We don't hide behind "proprietary black boxes."

Auditable Process

Every rating is documented, timestamped, and traceable. Fiduciaries can cite our analysis as independent third-party validation.

Our 9 Proprietary Ratings

Each rating measures a distinct dimension of risk. Together, they provide a complete picture of a company's risk profile.

FSN

Fiduciary Stock Navigator™

Our flagship composite rating. Integrates multiple proprietary indicators—financial deterioration, valuation risk, balance sheet health—to determine overall fiduciary suitability. Rated A+ to F.

25-year validation: 433,500 samples
LI

Loss Indicator™

Identifies companies at elevated risk of distress or collapse by evaluating financial strength, deterioration trends, and sustainability. Flagged 91% of bankruptcies 2 years before failure.

Critical for loss prevention
4D

4 Dimensions of Risk™

Evaluates deterioration across four key financial areas: solvency, liquidity, profitability, and tangible equity. Enables early identification of weakening fundamentals.

Early warning system
PRI

Price Risk Indicator™

Quantifies statistical probability and magnitude of future price changes based on valuation metrics and historical comparisons. Identifies when stocks are statistically more likely to rise or fall.

Valuation-driven analysis
ERI

Equity Risk Indicator™

Measures the relationship between equity value and overall risk exposure. Identifies companies where equity is overvalued relative to underlying fundamentals.

Equity valuation focus
FRR

Fiduciary Risk Rating™

Specifically designed for fiduciary accounts. Measures suitability for client portfolios based on risk tolerance matching and prudent investor standards.

Fiduciary suitability
DI

Deterioration Index

Tracks changes in financial health over time. Identifies companies experiencing deterioration before it shows up in stock prices or analyst reports.

Trend analysis
VI

Valuation Index

Compares current valuation metrics (P/E, P/S, P/B) against historical ranges for the company and industry. Identifies extreme valuations in either direction.

Historical comparison
RI

Resilience Index

Measures a company's ability to withstand adverse conditions—economic downturns, industry disruption, competitive pressure. Identifies durable businesses.

Durability measurement

How Our Ratings Work

1

Data Collection

We analyze audited SEC filings—three financial statements plus pricing data—for every company in our coverage universe. No estimated data. No analyst adjustments.

2

Pattern Recognition

We categorize "normal" behavior by company and industry across 10+ years of history. This establishes baselines for valuation, debt levels, profitability, and other metrics.

3

Deviation Analysis

We measure deviations from historical patterns. When debt increases 5x, or valuation exceeds historical norms by 3 standard deviations, the risk profile changes immediately.

4

Probability Calculation

Based on how similar situations have resolved historically, we calculate the statistical probability and magnitude of future price changes. Not predictions—probabilities.

5

Rating Assignment

Each stock receives letter grades (A+ to F) across our 9 rating dimensions. These are updated continuously as new data becomes available.

We Welcome Independent Audit

Choose any 2 of our 9 proprietary ratings. Submit them to McKinsey, PwC, or Deloitte for independent verification under strict NDA. We'll cooperate fully.

We don't hide behind "proprietary black boxes." Our methodology is documented, our validation is transparent, and our results are auditable. That's what independence means.

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