We appreciate you reviewing the ETF grades. From my perspective, and having been an ETF Trader, these are completely different instruments and it is very transparent in the ETF factor grades and underlying factor grades (one click away from the ETF stock page). Notably, leverage carries significant risk, significantly higher expenses, and very different performance from a momentum score - YTD, SOXX is down 28% and SOXL is down 76%. Additionally, one ETF has a substantially higher dividend rate and this impacts a quantitative scoring system. From a data driven perspective, these are two completely different investment vehicles. 

Hello,

We appreciate your feedback. Unfortunately, without an analyst covering the stock, there is no way we could know if an improving trend is due to a 'Turnaround' or another type of development. There could be a list of financial events or accounting principals that would lead to an increase or decrease in the CAGR rates for stocks with negative earnings. Additionally, while a 3-year or 5-year CAGR can show an improving trend overall, it could also have irregular intermittent annual swings, and it would not be accurate to exhibit 'Turnaround'. Therefore, it is probably best to leave stocks that generate negative earnings as 'NM' in the field value. Fortunately, in the financials page, users can look at the growth rates and get a picture at what is behind the 'NM' field description. Please do not hesitate to come forward with feedback, suggestions, or questions in the future. Thank you for your time and recommendation.

Hello, I really appreciate you reaching out and sharing your thoughts on our Value Factor Grade. Understandably, when the value factor grade is strong, and all the other factor group grades are weak, it is a clear sign that the company faces issues. In fact, our embedded quantitative parameters would prevent a stock from a having Very Bullish or Bullish recommendation in this scenario. With this in mind, many deep value investors seek to target stocks that are extremely cheap. Often, they look to identify the underlying value metrics, as an example, where EV to Earnings multiples are strong and conventional value metrics are weak or not rated. Our factor grades and quant ratings are provided to provide an instant characterization on how the company compares to its relative sector and to help empower investors make informed decisions along the lines of their preferred investment style. Displaying the value grade helps to identify these undervalued securities quickly. Indeed, a simple screen on our Ratings Screener exhibits 58 stocks out of 4000 equities that fall within these characteristics of strong value grades and weak grades across all other factor styles. The Quant recommendations on these securities range from Very Bearish to Neutral at best. Notably, 38 of these stocks exhibit professional Sell-Side analysts’ recommendations of Very Bullish or Bullish. Clearly, these analysts believe the companies possess some type of future quality that will lead to higher stock prices and better financial prospects. Deep value investors often seek to validate a company’s current qualitative business fundamentals, along with unknown or hidden earnings drivers, to determine an estimate of the company’s future value. These investors look beyond the consensus earnings estimates that we employ in our growth factor grade. It is common practice for these investors to perform business segment analysis, meet or speak with management teams, large shareholders, competitors and suppliers to identify why stocks are mispriced and pinpoint the hidden catalysts that will turn around a company’s prospects. In summary, investors hold different perspectives on a stock’s financial metrics, and they use our grades to identify securities that fit their investment style. What may be a value trap by most standards, or not investment worthy, could be viewed by others as an opportunity. I hope this explanation was useful.