Understand the Scores

Built by Professor Jones

Thirty years of academic research, applied to live markets.

The scoring engine that powers Financial Trends Australia was built by Professor Jones, the most cited academic in the accounting discipline in Australia (FASSA, FCPA, PhD). It distils three decades of machine learning research, applied to financial markets, into a scoring system that grades every listed company against the global universe.

How the scores work

Every score is a global percentile rank.

Each of Financial Trends Australia's scores measures where a stock sits relative to every listed company in the world, not just its sector or its country. A score of 90 means the company is in the top 10% globally for that specific metric. A score of 50 puts it in the middle. A score of 5 means only 5% of the world is worse on that dimension.

The implication: stocks scoring high across the board are quietly sitting in the top decile or two of the global universe, on multiple dimensions at once. Across enough names and enough time, the philosophy is straightforward. If you compare every stock in the world together, the best rise. It is very hard to lose buying the global elite consistently.

Score → Global Percentile

95 – 100 Top 5% of the world

80 – 94 Top 20%

70 – 79 Top 30%

55 – 69 Top 45%

45 – 54 Around the global median

30 – 44 Bottom 45%

0 – 29 Bottom 30%

In 30 seconds

Two headline scores. Eight underlying factors.

Every stock under coverage is reduced to two headline numbers, the Jones Dynamic Score (JDS) and the Alpha360 Score, both on a 0 to 100 scale. They sit on top of eight underlying sub-factors that drive the Jones Nebula chart you see on every Company Hub. Together they answer two questions. What is this company's risk-adjusted quality, and what is its outperformance potential?

Headline Score · 1 of 2

Jones Dynamic Score (JDS)

The JDS is a composite measure of a company's fundamental quality and risk profile. It blends the eight sub-factors into a single 0 to 100 percentile rank where higher is better. The higher the JDS, the more confident we are that the underlying business can weather different market regimes. It updates each time new financial data is ingested.

JDS Tiers

Elite

95 – 100

Best-in-class across the universe. Reserved for businesses with elite fundamentals and minimal risk markers. Rare.

Very Strong

80 – 94

Top decile of coverage. Robust profile with most factors in positive territory.

Strong

70 – 79

Quality threshold for buy consideration. Most active recommendations sit here or above.

Moderate

55 – 69

Mixed picture. Some factors strong, others weak. Often a Hold or pre-buy watch.

Average

45 – 54

Index-like. No strong signal in either direction.

Weak

30 – 44

Multiple risk markers triggered. We typically reduce or exit positions when JDS drops here.

Very Weak

0 – 29

Distressed or deeply impaired. Avoid; existing positions exited if not already.

Headline Score · 2 of 2

Alpha360 Score

Alpha360 measures the company's outperformance potential relative to the broader market. Where JDS asks "is this a good business?", Alpha360 asks "is the market mispricing it in our favour?" High Alpha360 paired with high JDS is Professor Jones's ideal setup. Tiers borrow from a rarity-grade colour vocabulary so the visual hierarchy is unmistakable.

Alpha360 Tiers

Elite

95 – 100

Exceptional alpha potential. Top fraction of a percent across the global universe.

Superior

80 – 94

Strong outperformance signal. The model expects meaningful index-relative returns.

Strong

70 – 79

Positive alpha tilt. Common across our active buy book.

Moderate

55 – 69

Meaningful but not dominant alpha. Often paired with a quality story driving the call.

Average

45 – 54

Roughly in line with the market on alpha terms.

Below Avg

30 – 44

Negative alpha tilt. The market is already in front of the story.

Weak

0 – 29

Persistent underperformance signal. Rarely a buy regardless of JDS level.

The Jones Nebula

The eight-factor Jones Nebula

The JDS and Alpha360 do the heavy lifting. Sitting beneath them are eight factors, and together they draw the Jones Nebula you see on every Company Hub. Each one is a proprietary composite, built and refined over decades of academic and applied research into valuation, distress and corporate failure. None is a single textbook ratio: each distils dozens of underlying inputs into one 0 to 100 percentile rank, scored against sector and market peers rather than in the abstract, so a 90 is a 90 wherever the company sits. You are not meant to add them up. They are here so you can read a company's shape at a glance: where it is strong, and where it is soft. A full, balanced shape is reassuring; a lopsided one tells you exactly where to look closer. A defensive name skews towards Financial Strength and Cash Flow; a growth name towards Growth and Earnings.

Example Nebula

Illustrative example, not a real company. Each axis is scored 0 to 100; the further out the point, the stronger. This profile is strong on quality and cash and lighter on growth, so its shape leans. That lean is what you read.

Valuation

High = cheap to its own worth · Low = priced for perfection

A proprietary read on how cheaply the business trades against what it actually earns, generates in cash and owns. It is not a single price-to-earnings or price-to-book number: it weighs several valuation lenses together, then normalises the result against the company's own history, its sector and the wider market before ranking it. A high score means the market is offering a genuine business at a discount to its fair value. A low score means you are paying a premium the fundamentals still have to grow into.

Earnings Performance

High = profit that holds up · Low = thin, erratic or flattered

Measures the quality and dependability of reported profit, not merely its level. It interrogates the track record of beats and misses, the size and direction of surprises, the consistency of margins, and how far earnings are backed by genuine operating performance rather than one-off items or accounting choices. High scorers compound predictably; low scorers tend to disappoint at exactly the wrong moment.

Operating Efficiency

High = turns capital into profit · Low = capital-hungry, low-return

How well management converts the assets and capital entrusted to it into returns. It blends return on equity and return on capital with margin durability and working-capital discipline, judged against sector norms so a capital-light software name and a heavy industrial are each assessed fairly. A high score is the signature of real pricing power and a durable economic moat.

Cash Flow Performance

High = profit becomes cash · Low = cash that never arrives

The most candid factor on the board. Earnings can be shaped by judgement; cash is far harder to manufacture. This score tracks the strength of free cash flow, how reliably reported profit converts into money in the bank, and how self-funding the business is. A persistent gap between earnings and cash is precisely the early warning this factor is built to surface.

Financial Strength

High = built to survive a shock · Low = stretched, cycle-exposed

The balance-sheet stress test, drawn directly from decades of research into corporate distress and failure. It weighs leverage, interest coverage, liquidity and debt structure to gauge how much pressure the business can absorb before its options narrow. A high score is the defensive moat that keeps a company solvent and in control through a downturn. A low score is where forced decisions get made.

Growth

High = expanding on several fronts · Low = flat or shrinking

The trajectory of the business across revenue, earnings and cash flow, measured over several horizons so a single strong year cannot flatter it and one soft year cannot condemn it. It combines realised history with forward consensus, and rewards growth that is broad-based and funded rather than bought. High scorers are genuinely becoming larger and more valuable, not simply busier.

Market Performance

High = price confirms the fundamentals · Low = the tape disagrees

Reads what the market itself is doing with the stock: momentum, trend and volatility behaviour. It tells you whether price action is voting with the underlying fundamentals or against them. Set beside the quality factors, it helps separate a cheap, strong business the market is starting to recognise from a value trap it keeps rejecting for a reason.

Analyst Sentiment

High = the street is upgrading · Low = estimates being cut

Aggregates the professional view across the analyst community: the direction of target-price revisions, the drift of consensus estimates, and the balance of upgrades against downgrades. Sentiment tends to move before the headline numbers do, so a rising score often flags improving expectations early, while a falling one warns that the people closest to the company are quietly marking it down.

Recommendations

What each rating means

Quantitative scores guide our research; the final call is human. Every covered equity carries one of four recommendations. We change them sparingly, only when conviction warrants, and the date stamp on each rating tells you exactly when our view shifted.

Buy

Our highest-conviction call. The research view is that the risk/reward favours establishing or adding to a full position, supported by both the score profile and Professor Jones's qualitative judgement. A Buy stands until fundamentals change, valuation stretches too far, or the desk steps back to a Half Sell.

Hold

A neutral research view. Often the resting state for quality names trading at fair value, or for stocks where the desk wants more data before pressing the call either way. A Hold neither argues for adding nor for trimming.

Half Sell

A signal that valuation has stretched, the thesis has matured, or part of the conviction has run. The research view is that trimming half a position would lock in profits while preserving optionality on the remainder.

Sell

Triggered by thesis breakage, sustained JDS deterioration, or risk events that materially change the investment case. The research view is that the position no longer warrants exposure. The desk is disciplined about this: capital preservation comes first.

Ratings are general financial product advice issued by Financial Trends Australia as Corporate Authorised Representative of MF & Co. Asset Management (AFSL 520442). They do not take into account your personal objectives, financial situation or needs. Whether a rating is appropriate for your circumstances is a decision only you (or your licensed adviser) can make.

High Conviction

When a stock graduates

High Conviction is the cream of the book. A small subset of buy-rated names where we have maximum conviction in both the quality and the alpha setup. They are the names where we actively want members to consider sizing up.

★ How a name graduates

There is no fixed JDS or Alpha360 cutoff. Every score on the platform is highly predictive on its own; Professor Jones reads them in combination and adds the qualitative judgement that quants alone cannot supply.

In practice, High Conviction names tend to share a profile:

They score well on JDS and Alpha360, with most of the eight underlying factors trending positive. The Jones Nebula usually looks visibly "full".
The fundamental story holds up under Professor Jones's review. The numbers and the narrative agree.
The setup is current. The desk has actively endorsed it at the latest research review, not months ago.

High Conviction names appear with a gold accent rail across the platform: on Company Hub cards, in the dashboard's HC count chip, and on the dedicated HC portfolio page. When you see gold, the desk is leaning in.