Finding exceptional companies with genuine long-term potential requires more than just checking stock charts or skimming headlines. You need deep, objective insights that cut through the noise and deliver meaningful intelligence.
That's where The Motley Fool's Moneyball Scores come in.
Motley Fool Moneyball Scores harness the power of artificial intelligence and decades of investing expertise to evaluate companies across multiple dimensions, helping investors identify high-quality businesses with the greatest potential for long-term success.
Key Takeaways
Motley Fool Moneyball: The Key Takeaways
- Motley Fool Moneyball Scores are AI-powered ratings that assess companies across a variety of factors, making it easy for investors to quickly research and identify the most promising companies.
- Companies earn a score of 1 to 100 within each category (although some might not have a score for certain categories). The higher the score, the better we think the company is inside that category relative to the universe of stocks.
- The Superscore combines all of the included metrics into one comprehensive rating, while individual scores evaluate specific aspects like Financial Health, Leadership Quality, and Technological Capabilities.
- The scoring system analyzes tens of thousands of data points using proprietary AI algorithms developed by experienced investors, focusing on long-term business performance rather than short-term market movements.
How Is It Different?
What Makes Motley Fool Moneyball Scores Different?
Motley Fool Moneyball stands apart from traditional investment tools by combining:
- AI-powered analysis that processes vast amounts of data points.
- Proprietary scoring algorithms developed by skilled investors.
- Multidimensional evaluation that looks beyond just financials.
- Clear numerical rankings that make comparison simple.
- Long-term business focus rather than short-term market movements.
"Motley Fool Moneyball is powered by artificial intelligence, informed by investing acumen, oriented to long-term business performance, and designed to help you make better investment decisions."Tom Gardner, Co-Founder of The Motley Fool
Scoring System Explained
The Complete Motley Fool Moneyball Score System Explained
Our proprietary database evaluates thousands of companies, assigning scores from 1 to 100 across nine key categories. The higher the score, the better a company ranks relative to others in the database.
Let's break down each type of score:
Superscore: The ultimate company assessment
The Superscore represents the unified measurement of a company's overall quality, combining insights from all other scores. Think of it as the executive summary of a company's strength.
- What it measures: Financial performance, product market position, technological capabilities, leadership quality, and relative valuation.
- Why it matters: The Superscore gives you a high-level view of a company's overall strength, making it easy to quickly compare different businesses.
Financial Score: Measuring Fiscal Strength
- The Financial Score evaluates a company's economic health and performance.
- What it measures: Return on net tangible assets, return on invested capital, comprehensive financial strength, sales growth, and more.
- Why it matters: Strong financial performance typically indicates a company that can withstand economic challenges, fund growth, and potentially deliver shareholder returns.
GARP Score: Growth at a Reasonable Price
The GARP Score measures a company's growth prospects relative to its current valuation.
- What it measures: The balance between growth potential and the price paid for that growth.
- Why it matters: GARP investing seeks to identify companies with solid growth prospects that aren't overvalued, potentially offering the best of both growth and value investing approaches.
Growth at a Reasonable Price (GARP)
Leaders Score: Evaluating Management Quality
The Leaders Score assesses the effectiveness of a company's leadership team.
- What it measures: Executive track record, shareholder returns generated, company financial performance, capital allocation decisions, and governance practices.
- Why it matters: Great companies are typically led by exceptional leaders who make smart strategic decisions and allocate capital effectively.
Product Score: Analyzing Competitive Advantage
The Product Score examines a company's offerings and market position.
- What it measures: Competitive strength relative to industry peers, product excellence, quality, customer satisfaction, innovation, and competitive edge.
- Why it matters: Companies with superior products or services often command pricing power, customer loyalty, and market share growth.
Tech Score: Measuring Technological Capabilities
The Tech Score evaluates a company's technological strength and innovation potential.
- What it measures: Core infrastructure, industry position, AI capabilities, and innovation potential.
- Why it matters: In today's rapidly evolving business environment, technological advantages often translate to business durability and success.
AI Score: Assessing Artificial Intelligence Capabilities
The AI Score focuses specifically on a company's artificial intelligence prowess.
- What it measures: AI quality, potential impact, depth of technical knowledge, infrastructure, and products.
- Why it matters: AI is transforming virtually every industry, and companies that effectively leverage AI may gain significant competitive advantages.
Competitive Advantage
Surge Score: Tracking Momentum
The Surge Score evaluates a stock's recent performance trajectory.
- What it measures: Historical price data with emphasis on recent monthly changes, normalized for current market dynamics.
- Why it matters: While Motley Fool investing generally focuses on long-term performance, momentum can indicate shifting market perceptions or business developments worth investigating.
ROUNTA: Return on Unleveraged Net Tangible Assets
ROUNTA is a specialized financial metric favored by Warren Buffett that measures efficiency.
- What it measures: A company's ability to generate cash flow from its physical asset base, ignoring debts, highlighting asset utilization and management skill.
- Why it matters: High ROUNTA scores indicate companies that excel at generating returns from their tangible assets. Warren Buffett particularly values this metric for assessing business efficiency.
ROUNTA Scoring Ranges:
| Subpar | Under 20% |
| Solid to Good | 20% to 50% |
| Very Good to Excellent | 50% to 125% |
| Terrific | 125% |
Incorporating Into Your Investment Research
How to Use Motley Fool Moneyball Scores in Your Investment Research
Moneyball Scores aren't meant to automatically generate buy or sell decisions. Instead, they provide valuable context that is meant to enhance your investment research process:
1. Identify potential investment candidates
Sort the database by Superscore to quickly identify high-quality companies worthy of deeper research.
2. Compare companies within an industry
Filter by industry to see how companies stack up against their direct competitors across various dimensions.
3. Match to your investment priorities
If you value technological innovation, focus on Tech and AI scores. If you prioritize financial stability, pay closer attention to Financial and ROUNTA scores.
4. Discover hidden gems
Look for companies with strong scores in areas that might be overlooked by the broader market.
5. Validate your investment thesis
Use the scores to check whether your assessment of a company aligns with the objective metrics in the Moneyball system.
FAQ
Frequently asked questions about Motley Fool Moneyball Scores
How often are Motley Fool Moneyball Scores updated?
Scores are updated quarterly to incorporate the latest financial data, business developments, and market dynamics.
Are Motley Fool Moneyball Scores perfect?
No scoring system is perfect. While we believe our Scores provide valuable insights, they should be used as one tool in your investment research process, not as the sole decision-making factor.
Which companies are included in the Motley Fool Moneyball database?
The database includes thousands of U.S. exchange-listed publicly traded companies, with a particular focus on the stocks recommended across The Motley Fool's services.
What makes the AI behind Motley Fool Moneyball different?
The system combines artificial intelligence with human expertise. While AI processes vast amounts of data, experienced investors design the algorithms, set the parameters, and continuously refine the scoring system.
Unlocking the Full Power
Unlock the Full Power of Motley Fool Moneyball Scores
While we've provided an overview of the Scores in this article, Stock Advisor members gain access to the Moneyball database featuring:
- Motley Fool Moneyball scores on nearly 200 Stock Advisor recommendations
- Customizable views to match your research process and investment priorities
- Sorting and filtering tools to quickly identify investment candidates
- Quarterly updates that incorporate the latest business developments
Take Your Investment Research to the Next Level
Ready to harness the power of AI-driven investment analysis?
Stock Advisor members get access to the Motley Fool Moneyball database, along with fully vetted monthly stock recommendations and our list of top-ranked stocks. All of this is backed by in-depth research and a community of like-minded investors focused on building long-term wealth.
