Ned Davis Research Announces New Equity Rating Models


Ned Davis Research, Inc. has developed new models to generate its approximately 1,400 individual stock ratings, formerly known as the Individual Stock Perspective ratings. The new NDR Equity Rating (Buy, Sell, Neutral) is based on a quantitative relative ranking system, as opposed to the previous model which was based on an absolute rating.

Given the new model, approximately 80% of the stocks rated by NDR will have a one-time rating change effective Monday, March 14, 2011. Stock ratings for future weeks will follow the new model accordingly.

A stock’s individual rating is based on a relative rank (0-100) across NDR’s proprietary Multi-Cap universe. A company with an overall ranking greater than 90 receives a BUY rating. A company with an overall ranking less than 10 receives a SELL rating. Companies between 10 – 90 receive a NEUTRAL rating.

NDR’s Multi-Cap universe consists of approximately 1,400 U.S.-incorporated stocks that meet liquidity requirements and have market cap in the top 97% of stocks on the NYSE, NASDAQ, and AMEX.

The new NDR Equity Ratings are based on fundamental and technical components. The factors chosen for a specific company are based on the entire universe of stocks NDR covers rather than those unique to a specific company, thus reducing the impact of stock-specific risk. The technical component of the revised model uses a dynamic approach to capture changing environments. As the environment changes, the technical component can switch from a trend-following to a mean-reverting system.

NDR’s Equity Reports are available on and through NDR’s third-party distribution providers.

“We are excited to offer new NDR Equity Ratings which favor profitable, undervalued companies with strong price momentum. Along with the rating system, the new NDR Equity Service contains detailed stock reports,” says Robert Schuster, Chief Operating Officer.

About Ned Davis Research Group:

Ned Davis Research Group serves institutional clients in over 3 dozen countries on six continents. Clients include banks and insurance companies, mutual funds and hedge funds, equity research departments, pension and endowment funds, broker-dealers and registered investment advisors.


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