Members LoginClime Quality Rating
Developed by Clime Asset Management – the investment team that powers StocksInValue – the Clime Quality Rating (CQR) is a powerful proprietary analysis, that defines a company’s financial health. Based on 70 pieces of financial data taken from a company’s accounts, the CQR has had extraordinary performance* (see performance below) in identifying potential shares to buy/watch for prudent long term investments, and equally, those stocks to avoid.
Each company has a unique CQR which is calculated twice a year. The current as well as past CQR appears as a percentage in the ratios page of the StocksInValue dashboard, while the current CQR is displayed as a 0 to 10 star rating on each valuation screen. We encourage investors to shop for companies as they would hotels, the more stars the better!
| Score | Description |
| 0 – 3 red stars | Financially weak, high probability of capital or solvency event. Avoid. |
| 3 – 5 blue stars | Marginal financial strength, generally sub-investment grade |
| 5 – 7 amber stars | Reasonable financial strength, possible investment grade |
| 7 – 10 green stars | Investment grade, sound financial strength |
What does CQR measure?
The CQR is based on decades of academic study. Building on the work of numerous luminaries in the field, which focussed primarily on the balance sheet, we have overlayed additional metrics – most notably: cashflow, profitability & earnings manipulation – to provide an even stronger delineation between ‘strong’ and ‘weak’ companies. A total of 45 ratios are calculated twice a year, from audited accounts, to look at the performance and solvency of the business and determine the CQR. This is an important consideration for investors – a company in poor financial health, is more likely to seek further debt funding (which could reduce profitability or dividend payments) or raise additional equity (which will dilute your share in that company).
Download a full report on the Clime Quality Rating and how it helps identify the best shares
View the most recent Clime Quality Rating Report
CQR Performance
The most recent CQR report (link above), outlines the complete performance of the rating. The highlight figures are:
CQR Top 50 – Out performance versus the All Ordinaries (over 5 years to the end of June) of more than 10% per annum*.
CQR Bottom 50 – Under-performance versus the All Ordinaries (over 5 years to the end of June) by more than 12% per annum*.
* Past performance is not a guarantee of future results.
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