Frequently Asked Questions:

What is the Premium Common Stock Rating Service?

What is the difference between the free Service and the Premium Service?

Why do I need a Common Stock Rating Service?

Why should rating definitions be standardized?

How does DeMarche conclude to “Buy, Hold or Sell” a security?

How accurate are DeMarche’s ratings?

What factors are rated?

What securities are included or not included?

Does the DeMarche Rating Service use quantitative techniques
or fundamental techniques?

How often does DeMarche update their information on the Service?

What does the Premium Service cost?

How do I subscribe to the Premium Service?

What is the Premium Common Stock Rating Service?
The DeMarche Premium Common Stock Rating Service makes specific Buy/Hold/Sell categories available to you. Most services provide financial information only. The DeMarche Premium Common Stock Rating Service puts valuable information about your stocks at your fingertips. The rating service is the result of a research project to standardize comparisons between common stock securities for public companies. Finance professionals now use various parts of the rating service for applications in investment management, investment consulting, corporate finance and investor relations.

What is the difference between DeMarche’s Common Stock Rating Service and the Premium Common Stock Rating Service?
DeMarche’s free Common Stock Rating Service provides ratings such as; industry, growth, value, expected growth, expected returns, trading volume and price concession. The free service also provides a list of stocks with their corresponding Industry. The free Common Stock Rating Service is excellent for understanding what the stock is or has been and how it fits into the overall community of available stocks. The rating service is a systematic ranking of stocks based on an objective set of factors.

DeMarche’s Premium Common Stock Rating Service provides the same information as the free Service plus it contains much more valuable and useful information, which is designed to supply you with DeMarche’s views as to the stocks that are listed in the Service. The supplemental information includes; ratings, various charts, key financial characteristics and “buy,” “hold,” and “sell” ratings.

While the supply of the Service and the information contained therein is not, and is not in any manner to be construed as, investment advice or a recommendation to buy or sell any security, we thought it helpful to provide you with information as to our research approach.

Our philosophy is to view individual securities and situations against a broader background of a well-diversified portfolio. While we realize that any portfolio that an investor may construct is the product of its parts, our research should not be viewed as a recommendation of or a proxy for any particular investment or the construction of any investment portfolio that you might consider – any investment decision that you make is solely your responsibility and is to be based on your own research and judgment.

Why do I need a Common Stock Rating Service?
In the past 100 years, a relatively standardized rating system emerged for the investment community’s “senior” security, corporate bonds. Today, bond investors speak in terms of “bond quality,” “coupon,” “maturity,” “sector” and “industry.” They do so with relative ease, and seldom talk about the micro-factors making up these collective ratings (although, credit analysts do delve into these micro-factors). Three rating services, Standard & Poor’s, Moody and Fitch provide similar ratings on many issues.

A standardized system for rating common stocks – the “junior” security – has evolved more slowly. Common stocks were not used by institutions in the investment community until the early 1900s, and were not in wide use until after World War II. The “language” of the stock market has tended to develop along the lines of individual securities and their peers. The trend in language for stock evaluation is moving toward a rating system like that of DeMarche, focusing on industry “ liquidity,” “expected growth,” “quality” and “expected return.”

In the 1950s and 1960s, industry classification was used as the only diagnostic to compare stocks and display the diversification of portfolios to clients. Today, it is normal to also think in terms of growth stocks or value stocks, big cap or small cap, etc. What’s missing is a standardized definition for each of those terms.

Why Should Rating Definitions Be Standardized?
The answer to this question is based on simple logic and factual analysis. While conventional wisdom may say that big stocks are higher quality than small stocks, not all big stocks are high quality and not all small stocks are low quality. Growth stocks are normally thought to be expensive, but not all growth stocks are expensive and not all value stocks are cheap. Furthermore, not all liquid stocks belong to big companies and not all illiquid stocks belong to small companies. Therefore a standardized rating or definition system allows analysis to be more precise and consistent.

How does DeMarche conclude to “Buy, Hold or Sell” a security?
The ratings are assigned based upon DeMarche’s proprietary research. At any given time, approximately 20 percent of the stocks will be assigned a “buy” rating: approximately the same percent being noted as “sell;” and the remainder of the stocks for which a rating is assigned are noted as “hold.”

How accurate are DeMarche’s results?
The rating that we apply is our assessment of the expected return of that stock. Generally speaking, stocks in the top portion of our list outperform stocks in the bottom portion of our list. Of course, no one can accurately predict future results. And we expressly disclaim any notion that we can do so or have any obligation or responsibility in that regard. The Service and the information contained therein is not and should not be considered individually or collectively as recommendation to buy or sell any stock or the basis on which to form any investment portfolio.

Although stated in terms of “Buy, Sell or Hold,” our research provides our general view as to the security and does not reflect, incorporate or take into consideration any particular or individual circumstance of any of our subscribers or users.

What factors are rated?
There are a number of factors that are useful when rating stocks, similar to the characteristics used in a bond rating system. Certainly quality is an important issue, but quality means different things to different people. Whether or not a stock is a growth stock or value stock is also important, but many money managers differ on what makes a growth stock and a value stock. At DeMarche, we feel you need an unbiased third-party to substantiate and analyze this data.
The industry classification is definitely important. Furthermore, looking at a stock’s expected return – we rate a stock’s expected return as “above average,” “average,” or “below average” – can provide essential information about real company performance. Finally, liquidity is one of the most important factors that should be part of any stock analysis. At DeMarche, we account for both Trading Volume and Price Concession to develop a true liquidity score.

What securities are included or not included in the Common Stock Rating Service and the Premium Common Stock Rating Service?
DeMarche reviews thousands of stocks from available industry databases. Generally, 3,000 to 5,000 stocks have sufficient financial information available for us to rate the stocks in our system. We use 3,000 of the most liquid stocks as the basis for our model and indexes, but we rate all stocks that have all of the financial information we need.

DeMarche has established policies and practices to reduce potential conflicts of interest. Because DeMarche does business with a number of corporations in the areas of corporate finance, investor relations and/or retirement fund consulting, DeMarche may, at times, have access to nonpublic information about clients and may be considered an “insider.” Therefore, DeMarche does not rank such clients in our Premium Common Stock Rating Service.

Does the DeMarche Rating System Use Quantitative Techniques or Fundamental Techniques?
The DeMarche system is based on quantitative databases and screens. Most of them are considered part of the fundamental research process. Founder and Chairman of DeMarche Associates Inc., Robert Marchesi, was a buy-side stock analyst at a major bank trust department in the 1960s and a buy-side analyst and portfolio manager at a major mutual fund company in the 1970s. Hence, the system he developed has fundamental origins. Based on that strong understanding of the core principles of stock stability, Marchesi also included progressive stock rating factors. Included among the 70 factors in the screening process are technical factors and behavioral factors such as earnings surprise and price momentum.

How often does DeMarche update their information on the Service?
DeMarche will update the Service every Thursday after the close of the New York Stock Exchange, subject to major holidays, at which time; any change in ratings will be reflected in the information contained in the Service. Typically the ratings will be posted before the market opens the next business day. Changes may occur based on a move in the stock’s price, a change in DeMarche’s estimate of expected return for that stock, a change in the assessment of the outlook for that company or a combination of any of these factors.

What does the Premium Service cost?
The Premium Rating Service is a low cost of $299 for one year.

How do I subscribe to the Premium Service?
To subscribe, simply click on the link below:

Subscribe Now

* The Service and the Web site have been published in the United States; use of the Service or the Web site is for U.S. residents and only where permitted by applicable law. This is solely for information purposes and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or product.

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