Swing Trader for Mid Caps: Comprehensive Intrinsic Sentinel (FA)

Overview and Suitability: The main concept of this robot is to analyze the fundamentals of companies to identify those whose intrinsic value exceeds their current stock price. This approach, known as “Value” investing, seeks to capitalize on undervalued stocks, providing a strategic entry point for investors. This robot is particularly suitable for beginners looking to invest in mid-cap stocks, combining ease of use with sophisticated analysis.

Strategic Features and Technical Basis

Strategic Features: The robot focuses on mid-cap stocks and employs a multi-faceted strategy, incorporating several types of Rankings: Piotroski, Debt, Gain, NCAV, and Greenblatt. These Rankings work in tandem to provide a comprehensive analysis of each stock's potential.

1. Piotroski Ranking: This Ranking evaluates the financial health of a company, predicting its future stock performance by combining various financial criteria into a single score ranging from 0 to 9. Higher scores indicate better financial strength.

2. Debt Ranking: It seeks companies with sound creditworthiness, ensuring that selected stocks have manageable debt levels and strong financial stability.

3. Gain Ranking: This Ranking emphasizes companies with active and healthy growth, focusing on those with a proven track record of earnings and revenue increases.

4. NCAV Ranking: The Net Current Asset Value (NCAV) Ranking identifies stocks trading at significant discounts to their intrinsic value. These stocks are often overlooked and underpriced, typically trading below their net tangible assets or liquidation value.

5. Greenblatt Ranking: Based on Joel Greenblatt’s Magic Formula, this Ranking measures a company's efficiency in generating profits from its capital, indicating overall quality and potential for high returns.

Technical Basis: The strategy integrates these Rankings into a cohesive system that trades mid-cap stocks. By utilizing quantitative analysis and rigorous financial criteria, the robot ensures a robust selection process aimed at maximizing returns while minimizing risks.

NCAV Ranking Details

• Deep Value Investing: Focuses on identifying stocks at a significant discount to intrinsic value, often trading below net tangible assets or liquidation value.

• Market Inefficiencies: Exploits stocks excessively punished by the market due to temporary issues, investor pessimism, or neglect.

• Quantitative Analysis: Utilizes metrics like price-to-book ratio, net current asset value (NCAV), and other valuation multiples.

• Margin of Safety: Ensures a steep discount to intrinsic value to reduce the risk of permanent capital loss.

• Short-Term Gains: Aims for quick gains by selling stocks once they recover to their intrinsic value.

• Risk and Reward: Balances potential high returns with the inherent risk of targeting fundamentally troubled companies.

Greenblatt Ranking Details

• Magic Formula: A systematic strategy using Return on Capital (ROC) and Earnings Yield to identify undervalued, high-quality companies.

• Quantitative Approach: Emphasizes metrics that measure company efficiency and market undervaluation to achieve superior returns.

Position and Risk Management: The robot is designed to manage up to 35 open trades simultaneously, with a fixed stop loss of 25%. This risk management strategy ensures that potential losses are limited, protecting the investor's capital.

Once the stocks are ranked by the Rankings, the robot selects those with the highest scores to initiate long positions. Trades are executed using market orders within 1-2 hours after the market opens, ensuring optimal liquidity and favorable entry prices.

Trading Dynamics and Specifications:

• Maximum Open Positions: Medium, allowing for diversified exposure while managing concentration risk.

• Robot Volatility: High, suited for navigating and capitalizing on market swings.

• Universe Diversification Score: Medium High, indicating a moderate array of instruments to hedge against sector-specific downturns and enhance profit opportunities.

• Profit to Dip Ratio (Profit/Drawdown): High, suitable for traders who are focusing either on high profit or low drawdown for potentially higher returns that makes it an ideal for all levels.

• Optimal Market Condition Medium: If the current market volatility is Medium then you should use the Best Robots in Medium Volatility Market (VIX is Medium - this indicator is coming soon).  

Disclaimer:  Disclaimers and Limitations 

Simulated Performance: All simulated performance results are derived solely from real-time calculations using historical data. Algorithms receive minute-by-minute historical prices and other data from Morningstar and generate trades in real time based on these historical inputs, effectively eliminating any hindsight bias. 

Actual Performance: All actual performance results are derived solely from real-time calculations using current data. Algorithms receive minute-by-minute current prices and other data from Morningstar and generate trades in real time based on these current inputs, effectively eliminating any hindsight bias. 

Gross Performance: Gross performance results do not deduct any fees or expenses. These results reflect the total returns generated by the AI Robots without considering the costs associated with accessing the service. 

Net Performance (current performance chart): Net performance results deduct fees to provide a more accurate representation of returns experienced by the user. These deductions can include: Model Fee Deduction: Net performance results may deduct a model fee equivalent to the highest subscription fee charged to the intended audience. Actual Subscription Fees: Net performance results may also deduct the actual subscription fees paid by the user for access to AI Robots.