Under the Hood

Market Power Indicator (MPI)

The algorithm “under the hood” of our SFTW Investor application that helps you identify undervalued stocks.

 

You use “algorithms” every day and probably don’t even realize.  The most famous algorithm is Google — who else but a computer program can help you search the entire Internet in less than a second?

An expert computer program is exactly what is needed to scan and sift through all of the market’s financial data about publicly-traded companies.  That’s where Market Power Indicator (MPI) was born — the algorithm under the hood of our Stocks for the Week Investor application that gives every stock in our database a safety score, which indicates the likelihood of long term growth.  

Our Safety Score

The Safety Score is the key of the MPI algorithm, a numerical rating from 1-99 that signifies a stock’s growth potential.  Stocks with a lower score have a lower growth potential; stocks with a higher safety score have a higher growth potential.

Inside our application, we also issue daily recommendations of stocks to watch. And the cornerstone of our application is access to our top 30 undervalued stocks — those stocks priced lower relative to their key metrics and safety score.

While relatively stable, safety scores for the 2,000+ stocks database are updated daily.  We don’t like to say whether any particular score is “high” or “low” — it’s all relative, and our algorithm is only a recommendation engine — we do not predict the future, there is always a risk of loss in trading.

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The Factors Behind MPI

Wondering what exactly the “secret sauce” is behind MPI?  We crunch publicly-available numbers, such as:

  • Market Cap
  • EBDITA
  • Adjusted Peg Ratio
  • EPS

While we don’t share all of our mathematical equations (hence the “secret” in the sauce), we don’t shy away from sharing the information we use — all of which you can find online as well.  If you’re still curious, you might take a look at one of our articles on Seeking Alpha, which highlight some of the things we’re looking at when we analyze a stock.

MPI For Your Website

Did you know you can incorporate our safety score algorithm into your website, platform, or financial service?  We can provide an API or data feed to give you fresh, daily safety scores that your employees or customers can access to help with making smart, effective investing decisions.

Contact Kevin Stewart to schedule your complimentary discovery session.

Want to know more?

Still have a question?   Contact our support team — we’d be happy to help.