At PARASUB, we've developed a sophisticated dual-layer scoring system that blends both fundamental and technical analysis to provide a comprehensive evaluation of investment opportunities. Our proprietary methodologies offer unique insights that traditional analysis often misses.
RPR: RELATIVE PEER RANK
The Relative Peer Rank (RPR) represents a paradigm shift in fundamental analysis. While traditional methods often compare companies against broad market indices or entire sectors, we've recognized a critical flaw in this approach: companies operate in specific competitive landscapes that require contextual evaluation.
"Meaningful financial analysis requires contextual comparison. Comparing an automaker's margins to a software company's tells you nothing of value; comparing it to its direct competitors reveals everything." — PARASUB Research
THE INNOVATION OF TRUE COMPETITOR ANALYSIS
Our breakthrough innovation in the RPR system is our AI-powered True Competitor identification. Rather than relying on simplistic industry classifications that group dissimilar businesses together, our advanced algorithms identify companies that:
- Target the same customer segments and price points
- Offer genuinely competing products or services
- Operate with similar business models and cost structures
- Face the same regulatory and competitive pressures
For example, while traditional analysis might compare all "restaurant" stocks together, our True Competitor system understands that quick-service burger chains compete in a fundamentally different market than high-end steakhouses or fast-casual salad concepts.
HOW RPR IS CALCULATED
Once we've identified a company's true competitive set, the RPR score evaluates its relative performance across multiple fundamental dimensions:
- Profitability metrics (margins, ROE, ROA)
- Valuation ratios (P/E, P/S, EV/EBITDA)
- Growth trajectories (revenue, earnings, free cash flow)
- Capital efficiency and return metrics
- Financial health indicators (leverage, coverage ratios)
By comparing each metric specifically against true competitors rather than broad industry averages, RPR reveals whether a company is truly outperforming in its actual competitive arena.
INTERPRETING RPR SCORES
PTS: PROPRIETARY TECHNICAL SCORE
The Proprietary Technical Score (PTS) represents our advanced approach to technical analysis. Unlike simplistic technical systems that rely on single indicators or subjective chart patterns, PTS employs a sophisticated multi-factor model focused on identifying high-probability continuation patterns in existing trends.
THE THREE PILLARS OF PTS
Our PTS model evaluates stocks based on three critical dimensions of technical strength:
TREND
Measures the strength and direction of the existing price movement. Our algorithms identify stable uptrends by evaluating price action relative to key technical levels, with emphasis on sustainable momentum rather than short-term volatility.
CONFIRMATION
Analyzes whether secondary indicators confirm the primary trend. Our system looks for alignment between price action and key confirmation signals, particularly focusing on crossover patterns that historically precede continuation moves.
ROOM
Evaluates whether a stock has sufficient momentum capacity to continue its existing trend. By measuring momentum oscillations, our algorithms identify stocks that show strong trends but haven't yet reached technical exhaustion points.
This three-dimensional approach allows PTS to identify stocks with established uptrends that still have significant room to run, avoiding both false breakouts and late-stage trend entries.
THE POWER OF CONTINUATION PATTERNS
Where many technical systems attempt to predict reversals (a notoriously difficult endeavor), PTS focuses primarily on continuation patterns. Research shows that trends tend to persist longer than most analysts expect, and our system excels at identifying stocks where existing trends are likely to continue based on technical confirmation signals.
INTERPRETING PTS SCORES
CUMULATIVE SCORE
Our Cumulative Score integrates both fundamental and technical perspectives to provide a holistic view of investment opportunities. This dual-factor approach mitigates the limitations of single-methodology analysis and helps identify stocks with both strong business fundamentals and favorable market momentum.
THE INTEGRATION METHODOLOGY
The Cumulative Score is derived through a straightforward but powerful formula:
For ETFs and certain other instruments where fundamental comparisons aren't applicable, the PTS score alone serves as the Cumulative Score, reflecting the technical strength of the security.
THE POWER OF DUAL-LENS ANALYSIS
The Cumulative Score offers unique insights by identifying scenarios of particular interest:
- High RPR + High PTS: The ideal scenario—fundamentally strong companies with positive technical momentum
- High RPR + Low PTS: Potential value opportunities—strong companies currently out of market favor
- Low RPR + High PTS: Momentum plays requiring caution—technically strong but fundamentally questionable
- Low RPR + Low PTS: High-risk situations best avoided by most investors
INTERPRETING CUMULATIVE SCORES
HOW SCORES INFORM OUR RATINGS
Our stock ratings are informed by these proprietary scores, though they also incorporate qualitative analyst judgment and forward-looking projections that purely quantitative measures cannot capture.
By integrating both fundamental competitive analysis and technical momentum evaluation, PARASUB's scoring system offers investors a comprehensive framework for evaluating investment opportunities that transcends the limitations of single-methodology approaches.
Our commitment to context-specific analysis—comparing companies to their true competitors and evaluating technical signals within their proper market framework—provides more meaningful insights than traditional approaches that lack this crucial contextual intelligence.