Our Research
How we combine consensus, sentiment data and
risk metrics to identify promising stocks.
At Lombard Analytics, our mission is to help you make better investment decisions by continuously identifying the amercian and european stocks exhibiting the most potential.
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How do we identify those promising stocks?
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How is risk management integrated in our models?
The answers to these questions reside in the statistical model that we apply on a daily basis. Let us tell you what it's all about, starting with a visual representation:
Quantifying Market Consensus
Our analysis start with by computing consensus metrics on all stocks composing our statistical universe. In other words, we want to obtain a clear, up-to-date view of what institutional inverstors (like banks, hedge funds and money managers) thinks of each stock.
This process is twofolds. We begin by combining all the expressed previsions published by financial analysts regarding a listed stock.
Then, we shift our focus to implicit opinions. Those differ from expressed previsions in the sense that they are not published, but reflect the actual decisions and preferences (buying and selling) from institutional investors. Implicit opinions are more complex to collect, but offer better forecasting power.
Assessing Trend Quality and Strength
Trend quality (also called ‘momentum’) assessment entails gauging the current direction and strength of a stock, a statistical process which allows confirming (or disproving) investors appetite for the studied company.
Concretely, it is calculated by combining several directional metrics and used by comparing the results to long term historical data or to peers (stock belonging to the same geographic of economic sector).
Combining into a Single Metric
The results of the steps above are combined in a single composite indicator, the Risk-Adjusted Expected Return, which is evaluated both in absolute terms (current level compared to peers and history) and through recent variation (3-month delta).
It is our single best estimator of the 12-month performance of a stock, and the basis of all our decision, listing and client reports.
Our research helps investors across the globe composing an efficient and robust portfolio composed of high-qualiity international stocks.
But don't take our words for it, form your own opinion by checking the complete track record of our top-ranked selections.