TL;DR
Stocks with 2024 ratings of 4+ averaged 6.74% price growth in 2025, versus a 10.53% decline for ratings 1 to 1.9, after trimming 5% from each tail. The untrimmed average gap was only 1.12 percentage points.
2025 ratings were compared with January through September 2026 growth across 4,098 outcomes, with 587 missing or unresolved windows excluded. Ratings separated outcomes more clearly across the broad cohort than among large companies. Profitability identified weaker businesses, but the highest ratios did not consistently select the strongest growth.
Strong ratings separated from weak ratings with a light trim
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| 1–1.9 | 604 | 542 | -10.53% | -16.18% |
| 2–2.9 | 1,699 | 1,529 | -0.12% | -4.10% |
| 3–3.9 | 1,477 | 1,329 | +2.43% | +0.93% |
| 4+ | 419 | 377 | +6.74% | +4.51% |
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4,199 stocks with both January 2 and December 31, 2025 prices. Five percent is removed from each tail of each rating band, retaining approximately 90%. Ordinary dividends are excluded.
Stocks rated 4+ averaged +6.74% price growth in 2025 after a 5% trim from each tail. Stocks rated 1 to 1.9 averaged −10.53%. The difference was 17.28 percentage points, and each successive rating band improved.
The pattern survives keeping approximately 90% of the observations. It extends beyond the middle-half summary in the original ratings article. These are averages of stock outcomes, rather than returns from a funded or rebalanced portfolio.
The 2025 ratings also separated strong from weak in 2026
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| 1–1.9 | 1,685 | 1,515 | -10.76% | -3.68% | -11.34% | 38.4% |
| 2–2.9 | 1,529 | 1,375 | +6.84% | +11.84% | +4.58% | 56.7% |
| 3–3.9 | 666 | 598 | +4.07% | +9.50% | -0.11% | 49.8% |
| 4+ | 218 | 196 | +6.81% | +8.74% | +4.30% | 56.4% |
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4,098 exact-window outcomes: 4,075 same-ticker date-price pairs and 23 independently verified renamed or acquired stocks. All company sizes are eligible.
The 4+ group averaged +6.81%, versus -10.76% for ratings 1 to 1.9, after removing 5% from each tail. The middle bands were uneven: rating 2 to 2.9 beat 3 to 3.9. Ratings distinguished weak companies more consistently than they ordered every higher grade in this nine-month period.
The full rating rank correlation was +0.206. This measures whether higher scores consistently correspond to higher individual returns. The band averages show how typical outcomes differed between groups.
The tails change the size of the advantage
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| 0% each tail | 100% | +7.65% | +8.78% | -3.68% | +8.74% |
| 5% each tail | 90% | -10.53% | +6.74% | -10.76% | +6.81% |
| 10% each tail | 80% | -15.38% | +5.79% | -12.08% | +6.18% |
| 25% each tail | 50% | -19.45% | +4.06% | -12.42% | +4.56% |
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Weak means ratings 1 to 1.9; strong means 4+. Cutoffs apply independently within each band. Boundary ties remain included.
In 2025, the strong-minus-weak average gap was 1.12 points without trimming, but 17.28 points with 5% removed from each tail. The complete and trimmed summaries answer different questions about the same outcomes.
Untrimmed averages include every covered outcome, including large winners and losses. The 5%, 10% and 25% trims show increasingly central outcomes. Trimming describes the distribution; it is not a trading rule that could remove tomorrow’s losers and winners before they occur.
The published January 2026 article already repeated its historical analysis with a 10% trim from each tail. The new 5% calculation is a lighter sensitivity, alongside full-outcome averages and medians.
Repeating the original published comparison
Inspect the published and current-data recreation side by side
The original study linked 2024 reports to 2025 stock growth. Repeating its band summary on today’s data gives +4.03% for ratings 4+ and −18.55% for ratings 1 to 1.9. That supports the original direction.
Restricting the recreation to common full-year price dates gives +4.06% versus −19.45%. The 5% and 10% checks above show how the result changes when more outcomes are retained.
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| 1–1.9 | -19.99% | -18.55% |
| 2–2.9 | -3.68% | -4.33% |
| 3–3.9 | +3.50% | +1.40% |
| 4+ | +4.51% | +4.03% |
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Both columns use the middle 50% within each band. The recreation uses 4,540 current price-matched records and the original per-ticker endpoint convention. It is a new canonical-data calculation, rather than recovery of the original BigQuery snapshot.
The rating relationship weakens among larger companies
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| Below $100m | 709 | -27.70% | +0.225 | +0.354 |
| $100m to $1bn | 1,109 | +2.74% | +0.178 | +0.137 |
| $1bn to $10bn | 1,238 | +3.75% | +0.045 | +0.054 |
| $10bn to $100bn | 603 | -0.16% | -0.056 | +0.024 |
| $100bn or more | 131 | +3.40% | -0.012 | +0.157 |
| Missing/nonpositive January 2 cap | 308 | -4.76% | +0.050 | +0.270 |
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Size groups use January 2 market cap. The income/assets statistic uses only usable financial observations within each group; metric-specific counts are retained in the research export.
A screen sorted by market cap can still include the full universe. Keeping only its first 1,000 rows creates a much narrower sample, with fewer weak-rated companies. The near-zero correlation in that large-company sample cannot stand in for all covered stocks.
Below $100 million starting market cap, the rating rank correlation was +0.225 and income/assets was +0.354. From $10 billion to $100 billion, they were −0.056 and +0.024. The broad relationship therefore depends partly on which company sizes are represented.
The microcap group had −27.70% median growth across 709 covered outcomes. This helps explain why adding many small, weak-rated companies changes the full-cohort result. Positive relationships within the smaller-company groups also remain visible.
Broad cohort versus the largest 1,000
Inspect how restricting the cohort changed the result
A screen sorted by market cap can still include the full universe. Keeping only its first 1,000 rows creates a much narrower sample, with fewer weak-rated companies. The near-zero correlation in that large-company sample cannot stand in for all covered stocks.
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| Stocks | 4,098 | 1,000 |
| Rating rank correlation | +0.206 | -0.037 |
| Weak-rated stocks | 1,685 | 87 |
| 4+ stocks | 218 | 143 |
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Starting market cap determines display order and the separately labeled largest-1,000 sensitivity. It does not restrict the broad cohort.
Ratings and six value measures, on the same broad cohort
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| FY2025 NexusTrade rating | 4,098 | 0 | +0.082 | +0.206 | +0.133 |
| Earnings yield (positive P/E) | 2,028 | 2,070 | -0.014 | +0.036 | -0.008 |
| Book / price (positive P/B) | 3,189 | 909 | -0.029 | +0.011 | -0.102 |
| Annual free cash flow / starting market cap | 2,541 | 1,557 | +0.037 | +0.163 | +0.142 |
| Quarterly net income / assets | 3,539 | 559 | +0.065 | +0.194 | +0.219 |
| Quarterly net income / revenue | 3,149 | 949 | +0.013 | +0.181 | +0.067 |
| Quarterly liabilities / assets | 3,247 | 851 | -0.036 | -0.008 | -0.075 |
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Usable plus missing-measure counts total 4,098 covered outcomes. Another 587 rated tickers have excluded growth windows. Pearson measures a linear relationship; rank correlation measures ordered outcomes. The final column caps each variable at its first and 99th percentiles.
Cheapness and business strength measure different things. Earnings yield and book / price compare valuation with accounting figures. Cash-flow yield, profitability and liabilities describe the business behind the stock. The quintile plots below show whether moving from a low measure to a high one corresponded to better outcomes.
Each comparison uses every usable value for that measure in the broad covered cohort. Negative cash flow and negative profitability stay in the analysis. Missing data reduces the count for that measure, with the missing count shown.
The lowest fifth by annual cash-flow yield had −20.47% median growth, the lowest income/assets fifth had −28.30%, and the lowest profit-margin fifth had −23.16%. These weak-business groups did poorly. The most profitable income/assets fifth still trailed the middle fifth, so maximizing that one ratio would not have selected the strongest typical outcome.
Annual free cash flow / starting market cap
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| 1 | -47699.76% to -9.66% | -20.47% | -3.05% | 34.4% |
| 2 | -9.60% to 0.87% | -4.21% | +11.90% | 46.1% |
| 3 | 0.87% to 3.98% | +3.53% | +9.82% | 53.1% |
| 4 | 4.00% to 7.95% | +0.52% | +4.83% | 51.0% |
| 5 | 7.97% to 7415.18% | +4.39% | +11.31% | 55.1% |
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2,541 usable observations and 1,557 missing measures among the covered outcomes. Fifth 1 is lowest and fifth 5 highest. Equal-value ties use ticker order.
The lowest cash-flow-yield fifth had −20.47% median growth. The plot shows the other four fifths alongside it, rather than assume that the highest yield always wins.
Quarterly net income / assets
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| 1 | -1903.90% to -5.55% | -28.30% | -13.31% | 29.7% |
| 2 | -5.54% to 0.01% | -3.97% | +11.92% | 45.3% |
| 3 | 0.01% to 0.71% | +8.58% | +11.36% | 63.3% |
| 4 | 0.71% to 1.89% | +2.84% | +8.88% | 54.1% |
| 5 | 1.90% to 682.29% | +0.88% | +6.40% | 51.8% |
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3,539 usable observations and 559 missing measures among the covered outcomes. Fifth 1 is lowest and fifth 5 highest. Equal-value ties use ticker order.
The lowest income/assets fifth had −28.30% median growth. The middle fifth returned +8.58%, versus +0.88% for the highest fifth: improving this ratio indefinitely did not steadily improve the typical outcome.
Earnings yield (positive P/E)
Inspect the five-group distribution and exact values
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| 1 | 0.01% to 2.60% | +3.21% | +10.00% | 52.7% |
| 2 | 2.61% to 4.15% | +1.87% | +7.37% | 52.7% |
| 3 | 4.16% to 6.12% | +3.32% | +6.54% | 56.2% |
| 4 | 6.13% to 8.95% | +6.65% | +10.90% | 62.7% |
| 5 | 8.95% to 189.58% | +7.33% | +9.09% | 57.5% |
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2,028 usable observations and 2,070 missing measures among the covered outcomes. Fifth 1 is lowest and fifth 5 highest. Equal-value ties use ticker order.
Book / price (positive P/B)
Inspect the five-group distribution and exact values
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| 1 | 0.07% to 18.68% | -6.56% | +0.52% | 42.9% |
| 2 | 18.68% to 38.58% | -1.56% | +7.09% | 47.8% |
| 3 | 38.63% to 70.30% | +3.21% | +9.38% | 54.9% |
| 4 | 70.53% to 114.43% | +6.70% | +10.14% | 60.3% |
| 5 | 114.44% to 118742.22% | -7.55% | -2.44% | 44.1% |
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3,189 usable observations and 909 missing measures among the covered outcomes. Fifth 1 is lowest and fifth 5 highest. Equal-value ties use ticker order.
Quarterly net income / revenue
Inspect the five-group distribution and exact values
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| 1 | -4667098.79% to -18.23% | -23.16% | -7.98% | 34.1% |
| 2 | -18.16% to 1.61% | +0.05% | +15.98% | 50.2% |
| 3 | 1.63% to 8.40% | +2.50% | +9.68% | 52.5% |
| 4 | 8.43% to 19.75% | +2.45% | +6.29% | 53.2% |
| 5 | 19.77% to 26517.76% | +6.84% | +11.63% | 62.8% |
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3,149 usable observations and 949 missing measures among the covered outcomes. Fifth 1 is lowest and fifth 5 highest. Equal-value ties use ticker order.
Quarterly liabilities / assets
Inspect the five-group distribution and exact values
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| 1 | 0.01% to 28.41% | -4.25% | +4.74% | 45.7% |
| 2 | 28.56% to 48.85% | +2.02% | +9.37% | 52.0% |
| 3 | 48.87% to 66.37% | -0.90% | +2.85% | 48.4% |
| 4 | 66.38% to 87.11% | -4.69% | +0.34% | 43.6% |
| 5 | 87.15% to 5940.64% | +4.57% | +5.58% | 54.1% |
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3,247 usable observations and 851 missing measures among the covered outcomes. Fifth 1 is lowest and fifth 5 highest. Equal-value ties use ticker order.
What the covered cohort includes
Of 4,685 rated tickers, 4,098 had a verified common-window outcome. The other 587 comprise 235 without a valid starting price and 352 starting-price rows whose full outcome is unresolved. These exclusions can change the relationship; the covered sample is not the whole market.
The 2025 comparison similarly uses 4,199 common-date price pairs from 4,678 rated tickers. These are covered-cohort estimates. Multiple listed share classes may represent the same issuer.
Show the table · 7 rows, 2 columns
| Coverage step | FY2025 rating cohort |
|---|---|
| Rated tickers | 4,685 |
| Exact January 2 starting price | 4,450 |
| Both same-ticker date prices | 4,075 |
| Verified corporate-action outcomes added | 23 |
| Exact-window outcomes analyzed | 4,098 |
| Starting-price rows without a verified common-window outcome | 352 |
| No valid January 2 starting price | 235 |
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Missing and different-window records remain in the coverage accounting. They are not assigned invented growth or silently included at shorter holding periods.
Follow renamed and acquired stocks through the outcome
Inspect all 23 verified renames and acquisitions
BK became BNY, PSTG became P, SATS became ECHO, and EQR continued as VMRK. Other targets paid cash or converted into buyer shares. A literal-ticker join missed these outcomes even though their shareholders received value.
TopBuild uses the stock/default-no-election outcome, with an approximately prorated cash-election sensitivity recorded separately. Hologic uses its $76 cash payout and excludes the non-tradable contingent right. Up to $3 of possible future proceeds is an additional sensitivity, rather than an observed September price. Cash proceeds stay in cash without interest.
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| BK | Ticker change | 1 BNY + $0 | +23.57% |
| EA | Take-private | 0 + $210 | +2.73% |
| CUK | DLC unification; ADS exchanged | 1 CCL + $0 | -20.01% |
| SATS | Ticker change | 1 ECHO + $0 | -20.30% |
| AVB | Stock merger | 2.793 VMRK + $0 | -5.97% |
| EQR | Merger; continuing security renamed | 1 VMRK + $0 | -2.05% |
| PSTG | Ticker change | 1 P + $0 | +89.51% |
| EXAS | Acquisition | 0 + $105 | +3.20% |
| HOLX | Take-private | 0 + $76 | +1.93% |
| BLD | Acquisition | 20.2 QXO + $0 | -45.27% |
| CMA | Stock merger | 1.8663 FITB + $0 | +6.48% |
| DAY | Take-private | 0 + $70 | +1.05% |
| GTLS | Acquisition | 0 + $210 | +1.83% |
| JHG | Take-private | 0 + $52 | +8.83% |
| NUVL | Acquisition | 0 + $124 | +22.97% |
| AL | Take-private | 0 + $65 | +1.33% |
| CWAN | Take-private | 0 + $24.55 | +1.82% |
| LBRDK | Acquisition | 0.236 CHTR + $0 | -46.30% |
| LBRDA | Acquisition | 0.236 CHTR + $0 | -46.05% |
| MASI | Acquisition | 0 + $180 | +41.29% |
| NGD | Stock acquisition | 0.4959 CDE + $0 | +1.96% |
| APGE | Acquisition | 0 + $135.11 | +78.29% |
| SEE | Take-private | 0 + $42.15 | +1.52% |
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All 23 literal-ticker misses in the original largest-1,000 screen have verified identity or consideration records and remain in the broad outcome set.
Financial coverage and statement age
Inspect financial coverage and statement age
The latest annual and quarterly filings can have different ages, and a recently filed record can describe an older financial period. Both dates remain in the research export. Usable ratios also require the relevant fields and a positive denominator. Missing or nonpositive market cap prevents a cash-flow yield calculation.
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| Annual | 3,774 | 324 | 298 days | 368 days | 4 / 8 older than 548 days |
| Quarterly | 3,564 | 534 | 57 days | 95 days | 12 / 34 older than 183 days |
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Age runs from filing availability to the January 2 market close. The old-record thresholds are descriptive flags; they do not remove observations.
How to reproduce the comparison
Read the calculation, price and model conventions
Select one stored annual report per ticker for the rating year. For FY2025, use January 2 to September 30, 2026 stock growth. Sort the display by market cap observed on January 2, then retrieve the full cohort before calculating statistics.
P/E and P/B come from the starting price observation. Annual free cash flow is divided by starting market cap. Quarterly income is divided by assets and revenue respectively; liabilities are divided by assets. The financial record is the latest available by the January 2 market close. These quarterly ratios are not annualized profitability measures.
Growth uses split-adjusted prices and verified merger proceeds. Ordinary dividends, transaction fees, taxes and interest on cash are excluded. Compare raw means, medians, 5%, 10% and 25% trims, then examine company-size subsets separately.
The stored rating date identifies its financial source rather than an immutable generation timestamp. The 2024 cohort is predominantly Qwen Turbo; the 2025 cohort uses Gemini Flash and Flash Lite. These model and data differences matter when comparing years. The results describe historical associations.
Turn the relationship into a portfolio question
A rating gap can justify testing a selection rule. Portfolio returns also depend on valuation, weights, refresh timing, dividends and costs. The three companion studies show how those choices changed results after the initial screen.
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