Quadrix

Definition

Quadrix is a proprietary stock-rating system developed by Horizon Investment Services. It utilizes over 100 variables across six categories including quality, value, momentum, financial strength, earnings estimate revisions, and market performance to assign an overall percentile score for a stock. The higher the score, the better the stock is evaluated in terms of expected future performance.

Phonetic

The phonetic pronunciation of the keyword “Quadrix” is: K-W-A-H-D-R-I-K-S

Key Takeaways

Quadrix is a stock-rating system that utilizes a proprietary quantitative model to evaluate the attractiveness and potential performance of stocks based on a variety of factors, including value, quality, growth, and momentum.
The system is designed to assist investors in making informed investment decisions by providing a comprehensive analysis of a stock’s financial health, business fundamentals, and potential for future growth and profitability.
Quadrix scores are calculated based on the company’s performance in various financial metrics, providing a single composite score that ranks stocks from 0 to 100, with higher scores indicating a more favorable investment opportunity.

Importance

Quadrix is important in the business and finance world as it is a proprietary stock rating system developed by Horizon Investment Services, designed to evaluate the attractiveness of stocks based on various quantitative factors. This system assists investors in making informed decisions by combining over 100 different characteristics and condensing the information into a single score based on six key categories: Quality, Value, Financial Strength, Earnings Estimates, Performance, and Market sentiment. By providing an easily accessible and comprehensive metric, Quadrix enables investors to compare, analyze, and select potentially high-performing stocks, thereby increasing the likelihood of making more effective investment decisions.

Explanation

Quadrix is a proprietary financial evaluation system utilized by investment professionals and analysts to streamline the stock selection process. Its primary purpose is to provide an efficient and objective way of conducting research on various companies and to make sound investment decisions. By employing a quant-based approach, Quadrix seeks to evaluate a company’s potential by meticulously assessing more than 100 key financial indicators, which are then scored and consolidated into a single, consolidated score ranging from 0 to 100. The higher the score, the more favorable the stock is considered for investment. The usefulness of Quadrix as an investment tool lies in the simplicity of its overall score while still maintaining a comprehensive analysis of a company’s financial health. By providing a single numerical value, it allows investors to compare different stocks within the same industry or across various industries easily. Furthermore, the system is designed to focus on multiple performance areas, such as value, growth, and momentum, which ultimately makes it a robust decision-making tool for investors and analysts alike. By leveraging the power of Quadrix, users can efficiently sort through vast amounts of financial data and identify investment opportunities with increased accuracy and efficiency.

Examples

Quadrix is a proprietary stock-rating system developed by Horizon Publishing Company that evaluates a company’s attractiveness based on six categories: Momentum, Quality, Value, Financial Strength, Earnings Estimates, and Performance. Here are three real-world examples of how Quadrix has been utilized in business and finance: 1. Investment Research and Analysis: Many financial analysts and investment researchers use the Quadrix rating system as a tool in their analysis process to identify attractive or undervalued stocks. For example, research firms may evaluate and rank companies in a specific industry or sector based on their Quadrix scores to provide buy or sell recommendations to investors. 2. Portfolio Construction: Some portfolio managers employ the Quadrix system to build and manage their investment portfolios. By selecting stocks with high Quadrix scores, they aim to create a well-diversified portfolio that has a strong potential for long-term growth and capital appreciation. Quadrix can be instrumental in the decision-making process, helping portfolio managers identify stocks with robust fundamentals and strong potential for future performance. 3. Mutual Fund Selection: Some mutual fund managers utilize the Quadrix rankings to select the stocks they want to include in their funds. By using the Quadrix system, these managers can sift through numerous stocks to identify those with the best combination of characteristics across the six categories. This can help them build a diversified mutual fund aimed at providing consistent returns to their investors.

Frequently Asked Questions(FAQ)

What is Quadrix?

Quadrix is a proprietary stock rating system developed by Horizon Investment Services, a financial research firm. It evaluates public companies based on over 100 financial variables across six categories: momentum, quality, value, financial strength, earnings estimate revisions, and performance. Using these factors, each stock is then ranked with a percentile score on a scale of 0 to 100.

How does the Quadrix scoring system work?

The Quadrix system evaluates a company’s performance within the six defined categories, assigning scores based on their relative performance. A company that scores high in all categories will receive a higher score, indicating a potential better investment. The objective of the scoring system is to identify stocks that are likely to outperform their peers in the market.

What are the six categories used in Quadrix?

The six categories used in Quadrix are:1. Momentum – Measures a stock’s recent price performance and changes in earnings growth.2. Quality – Considers factors related to a company’s profitability and operating efficiency.3. Value – Assesses a stock’s valuation levels based on metrics such as price-to-earnings and price-to-sales ratios.4. Financial Strength – Analyzes a company’s financial health by looking at its balance sheet and liquidity position.5. Earnings Estimate Revisions – Examines trends in earnings estimates revisions by analysts.6. Performance – Evaluates a stock’s relative performance compared to sector peers and market indices.

How can Quadrix scores be used in investment decisions?

Investors can use Quadrix scores as a starting point for further analysis and research by identifying potentially undervalued stocks or those poised to outperform their peers. The scores can help investors make more informed decisions by providing a comprehensive analysis and ranking of various aspects of a company’s financial health.

Does a high Quadrix score guarantee good investment performance?

No, a high Quadrix score does not guarantee a profitable investment. The system is a tool to assist in making informed investment decisions, but it cannot predict future market movements or changes in individual company performance. Investors should always consider other factors such as their risk tolerance, investment objectives, and industry trends before making a final decision.

Is Quadrix applicable to all sectors and industries?

While Quadrix is designed to rank companies across various sectors and industries, some sectors may be better suited for analysis using the system. It may not be as effective in analyzing companies in sectors with unique characteristics, such as utilities or real estate investment trusts, which have different financial metrics and business models.

How can I access Quadrix scores?

Quadrix scores can be accessed through Horizon Investment Services’ subscription-based service, which offers the ratings along with additional research and analysis. Some online brokers may also provide access to Quadrix ratings for customers as part of their research and screening tools.

Related Finance Terms

Quantitative Scoring System
Investment Analysis
Stock Evaluation
Portfolio Management
Performance Metrics

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