Thirteen yes/no questions on quality, valuation, analyst sentiment and price momentum: each criterion +1, 0 or −1, automated across the entire market.
Save the strategy and StockScorer checks its rules for you every day. You'll get a heads-up whenever a stock crosses the upper or lower score threshold.
Once enough history is available, the backtest chart for this strategy will appear here.
Every stock runs through the same disclosed rules. The points add up to a score, traceable down to the individual rule.
Each rule checks a metric against a threshold, for example ROE above 15 %.
You decide how much each rule counts: from +1 to +3 or −1 to −3.
The sum is the score. Above the upper threshold: a high match with the profile.
These terms describe only the match with the criteria, not a recommendation to buy or sell.
Return on equity above 20%, EBIT margin above 12% and a solid equity ratio form the foundation.
Current P/E and 5-year P/E below 12 count as cheap, above 16 as expensive.
Analyst opinion, price reaction to quarterly results and earnings revisions measure sentiment, interpreted by size class.
6- and 12-month relative strength plus a dedicated criterion for the fresh uptrend.
For structured investors who want a complete, traceable criteria catalogue and are prepared to review positions rigorously by score: the system lives on regular re-assessment, not on the one-off purchase.
The 13-criteria scoring system is the best-known German approach to rule-based stock selection, popularised by former fund manager Susan Levermann. Its strength lies in completeness: fundamental quality (return on equity, margin, equity ratio), valuation (current and historical P/E), market sentiment (analyst opinion, reaction to quarterly results, earnings revisions) and price momentum are condensed into a score from −13 to +13. Particularly clever is the asymmetric treatment of analyst opinion: for large caps it counts as a contrarian indicator, for small and mid caps as a trend-following signal.
Each of the 13 criteria awards +1, 0 or −1. Quality: return on equity above 20%, EBIT margin above 12%, equity ratio above 25% (financials: above 10%, because balance-sheet leverage is part of their business model). Valuation: current and 5-year average P/E each below 12. Market sentiment: analyst opinion, price reaction to the latest quarterly results and the direction of earnings revisions. Momentum: relative strength over 6 and 12 months, the momentum shift and (large caps only) the three-month reversal.
Two criteria switch roles depending on size class: analyst opinion is a contrarian indicator for large caps (majority scepticism earns the point) and a trend-following signal for small and mid caps (majority optimism counts positively). The three-month reversal (a short-term underperformance as an entry signal) applies only to large caps, where exaggerations are arbitraged quickly.
The upper threshold is 4 points for large caps, 5 for mid caps and 7 for small caps; below 3, 4 and 5 points respectively the lower zone begins. Small caps need more points because thinner analyst coverage means more data noise.
Quality: (1) return on equity > 20%, (2) EBIT margin > 12%, (3) equity ratio > 25% (financials > 10%).
Valuation: (4) P/E 0–12, (5) 5-year P/E 0–12, each −1 above 16, or with a negative or missing value.
Market sentiment: (6) analyst opinion (large: contrarian; small/mid: trend-following), (7) price reaction to quarterly results vs. market, (8) direction of earnings revisions.
Momentum: (9) 6-month relative strength ± 5%, (10) 12-month relative strength ± 5%, (11) fresh uptrend (6M strong, 12M not yet), (12) three-month reversal (large caps only), (13) expected earnings growth ± 5%.
The system's strength is the interaction of factor families: fundamental strength alone is not enough, it needs technical confirmation, and vice versa. Exactly this combination makes the approach more robust than pure value or momentum strategies.
Documented implementation details: the price reaction to quarterly results is measured market-adjusted with a neutral zone of ±1%. The earnings revision (criterion 8) uses the trend of analyst sentiment over the past three months as a proxy, earnings growth (criterion 13) the comparison of expected to current earnings per share. Missing fundamentals (criteria 1–5) conservatively count to the minus tier; missing market and sentiment data stays neutral, so thinly covered small caps are not systematically penalised.
In the backtest, the sentiment criteria (analysts, quarterly reaction, revisions) and the size-dependent rules are neutralised for lack of historical data points. The data-quality panel in the backtest discloses this transparently.
For investors who want to apply a proven, complete criteria catalogue systematically, and who bring the discipline to critically review positions when the score drops.