About Compass Score
Our Mission
Investing shouldn't require a finance degree. Yet every time someone asks "what stock should I buy?" they're told to "do your research" - and then handed hundreds of metrics, ratios, and charts that mean nothing to a beginner.
We built Compass Score to solve this problem. One number. One grade. Backed by 30 years of data.
The Problem We're Solving
The investing industry has a knowledge gap problem. On one side, you have institutional investors with Bloomberg terminals and teams of analysts. On the other side, you have regular people who just want to grow their savings.
The tools available to retail investors either:
- Cost $30-50/month and assume you already know what you're doing
- Push oversimplified "buy/sell" ratings with no transparency
- Focus on hype and momentum rather than company quality
We believe there's a better way.
Our Approach
The Compass Score is built on decades of academic finance research. We didn't invent these concepts - we just made them accessible.
The factors we use (profitability, cash flow, low volatility, conservative investment) have been studied by researchers at institutions like Chicago, Dartmouth, and MIT. Our contribution is packaging them into a single, easy-to-understand score.
Transparency
Unlike many rating systems, we tell you exactly how the score is calculated:
- 20% Return on Assets (profitability)
- 20% Gross Profitability (business strength)
- 15% Operating Cash Flow (cash generation)
- 15% Free Cash Flow (shareholder value)
- 15% Low Volatility (stability)
- 15% Conservative Growth (sustainability)
No black boxes. No proprietary algorithms we won't explain. Just straightforward, research-backed metrics.
What the Score Is (and Isn't)
The Compass Score identifies high-quality companies. In backtesting, stocks with higher scores have historically outperformed those with lower scores by about 6% annually.
It is not a crystal ball. The score measures company quality, not future price movements. A high-quality company can still have a bad quarter. A low-quality company can still get lucky.
Think of it like a health checkup for stocks. A clean bill of health doesn't guarantee you won't get sick, but it's better than ignoring the warning signs.
Disclaimers
The Compass Score is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results. All investments involve risk, including potential loss of principal. Always do your own research and consider consulting a financial advisor before making investment decisions.