What Are the Benefits of the StockScouter Rating System?


Quick Answer

The StockScouter system rated stocks based on characteristics that indicate likely value as an investment and forecast future value growth, as Helpmax reports. StockScouter was removed from the MSN money portal online in October 2014 and replaced with a new stock analysis system, as OptionSamurai describes.

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Full Answer

StockScouter used a simple rating scale to rank thousands of stocks, as Helpmax explains. Stocks were scored from 1 to 10, with better stocks receiving higher ratings. Higher-ranked stocks offered better returns on investment for the risk required. This system simplified investing by accounting for four factors influencing stock prices, each of which was given its own ranking, and providing investors with a single score expressing the stock's investment potential. Ratings were available for a variety of stocks in different sectors and provided investors with information about a broad range of investment options.

The ranking formula considered ownership of the stock among top executives, earnings growth, stock valuation and stock value trends, notes Helpmax. Using these four factors, adjustments were made using a proprietary formula. Each factor was weighted differently and was included in the final equation along with volatility of the stock. These features improved accuracy and provided investors with more reliable predictions.

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