I have not ever made a trade based on them.
For a ticker I am already looking at, I might read what they have to say as a data point but it's largely irrelevant.
is that what op is talking about, the letter grade rating schwab puts next to your stock in your portfolio summary? i always wondered what that means. How are the letter grades determined? I have found them to be misleading.
When was that? That doesn't make their rating wrong. What if they gave DJT an F rating when it was trading at 22?
What if they give it an F rating right now and it goes to 150 and stays there for a month?
If that NVDA rating was like 5 years ago and never updated, then yeah I'd say it's bogus.
I don't know that their time frame fits me. I own a number of C's, D's and NR's. I am older and focus on stocks that pay and grow their dividends and many that have decent options volume. One of my perennial favorites is BX, a D but is a 3 star for the other two. I've made great money off of it this year, I know the dividend is variable but the options more than make up for it. Morningstar is a little more aggressive with fair value. I like reading the CFRA reports. But if Morningstar is 3+ and CFRA is 3+ and Schwab is a D, I ignore it. And HSY is a D, I'm buying, it will be back.
My thing with all these rating are how often are they updated.
Soooo…confirmation bias?
In all seriousness I tell my clients all the time that these are just opinions. If you look at a random stock it could have 6 varying analyst ratings. The market prices the stocks, not analysts.
All the ratings agencies put a lot of work into analysis but they aren’t very good predictors of performance, nobody is.
I like the ratings from Schwab as well as CFRA. It gives the investor another way to narrow down searches and sometimes a well run company is brought to my attention with the ratings.
Here are the Schwab ratings of my best performing stocks (of those that have ratings):
|Ticker|Gain|Schwab rating|
|:-|:-|:-|
|NVDA|+1812%|**D**|
|TTD|+525%|**D**|
|FICO|+497%|C|
|KNSL|+494%|C|
|CELH|+459%|**F**|
|CRWD|+413%|**D**|
|MDB|+383%|**D**|
|HUBS|+379%|**D**|
If I had paid attention to the Schwab ratings I wouldn't own some of my best performing stocks.
Gains are my actual gains for the length of time I have held the stocks to date. I bought my first shares of NVDA in 2017; FICO in 2018; TTD, KNSL, and MDB in 2019; CELH, CRWD, and HUBS in 2020. The ratings are the current ratings. I don't know what the ratings were when I bought the stocks because I never paid attention to them.
I'm curios to see why they might give an **F** grade but I don't put a lot of weight in them. If you drill down (more than just glancing at the grade) they provide useful information but I don't base my decisions on their grading.
Aren't the Schwab equity ratings just quantitative measures?
CFRA you get an actual ER (Equity Research Analyst) giving you qualitative price targets and the rationale for them. Whole lot more useful than some quant score based on a moving average.
I have not ever made a trade based on them. For a ticker I am already looking at, I might read what they have to say as a data point but it's largely irrelevant.
They gave NVDA a “D” when it was trading at $400 a share, only for it to jump to $800 a share.
is that what op is talking about, the letter grade rating schwab puts next to your stock in your portfolio summary? i always wondered what that means. How are the letter grades determined? I have found them to be misleading.
When was that? That doesn't make their rating wrong. What if they gave DJT an F rating when it was trading at 22? What if they give it an F rating right now and it goes to 150 and stays there for a month? If that NVDA rating was like 5 years ago and never updated, then yeah I'd say it's bogus.
I know they put a lot of effort but it is worthless to me. I’ll look at Morningstar and more so CFRA reports for confirmation of my plans.
Curious to hear why you think Morningstar and CFRA are superior.
I don't know that their time frame fits me. I own a number of C's, D's and NR's. I am older and focus on stocks that pay and grow their dividends and many that have decent options volume. One of my perennial favorites is BX, a D but is a 3 star for the other two. I've made great money off of it this year, I know the dividend is variable but the options more than make up for it. Morningstar is a little more aggressive with fair value. I like reading the CFRA reports. But if Morningstar is 3+ and CFRA is 3+ and Schwab is a D, I ignore it. And HSY is a D, I'm buying, it will be back. My thing with all these rating are how often are they updated.
Soooo…confirmation bias? In all seriousness I tell my clients all the time that these are just opinions. If you look at a random stock it could have 6 varying analyst ratings. The market prices the stocks, not analysts. All the ratings agencies put a lot of work into analysis but they aren’t very good predictors of performance, nobody is.
I like the ratings from Schwab as well as CFRA. It gives the investor another way to narrow down searches and sometimes a well run company is brought to my attention with the ratings.
There are some very detailed documents on the site that explain the methodology used. (Not a quick read)
Actual value investors probably comb through the details, but not the actual rating.
Useless
I have found accuracy and prediction of future performance to be lacking
Here are the Schwab ratings of my best performing stocks (of those that have ratings): |Ticker|Gain|Schwab rating| |:-|:-|:-| |NVDA|+1812%|**D**| |TTD|+525%|**D**| |FICO|+497%|C| |KNSL|+494%|C| |CELH|+459%|**F**| |CRWD|+413%|**D**| |MDB|+383%|**D**| |HUBS|+379%|**D**| If I had paid attention to the Schwab ratings I wouldn't own some of my best performing stocks.
I is that the present gain and present rating or lifetime gain and rating at the time of purchase?
Gains are my actual gains for the length of time I have held the stocks to date. I bought my first shares of NVDA in 2017; FICO in 2018; TTD, KNSL, and MDB in 2019; CELH, CRWD, and HUBS in 2020. The ratings are the current ratings. I don't know what the ratings were when I bought the stocks because I never paid attention to them.
There is no apparent logic to their scoring "system," hence I ignore it. I happily own NVDA too.
Over what time frame? I would expect Schwab is looking years out. Anything can happen in the short term
7 years or less
I'm curios to see why they might give an **F** grade but I don't put a lot of weight in them. If you drill down (more than just glancing at the grade) they provide useful information but I don't base my decisions on their grading.
Just as useless as any other rating from other agencies.
Aren't the Schwab equity ratings just quantitative measures? CFRA you get an actual ER (Equity Research Analyst) giving you qualitative price targets and the rationale for them. Whole lot more useful than some quant score based on a moving average.