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What is the BetterInvesting SSG?
The Stock Selection Guide (SSG) is a structured analytical tool developed by BetterInvesting (formerly NAIC) to evaluate whether a stock is a quality growth company and whether now is a good time to buy, hold, or sell it. It was designed for investment clubs and individual investors who want a repeatable, discipline-driven process — not gut feel.
The SSG answers two fundamental questions:
This app implements the BetterInvesting SSG core valuation model — canonical Section-4 price zoning, Relative Value (Section 3), projected Total Return (Section 5), PEG, and forecast U/D ratio — on top of live Yahoo Finance data, producing a canonical BUY / HOLD / SELL signal for each position.
Signal Combinations
SigmaSignal evaluates every holding under two independent frameworks. The Portfolio Signal (HOLD / REDUCE / EXIT) reflects fundamentals — quality, valuation, and degrading-winner detection — and answers "should we keep this position?" The SSG Zone Signal (canonical BUY / HOLD / SELL — no WATCH) reflects current price attractiveness via the BetterInvesting SSG core and answers "is now a good time to act?" The combination tells you what to do next.
| Portfolio | SSG Zone | Interpretation & recommended action |
|---|---|---|
| HOLD | SSG: BUY | Quality position in the BI buy zone — ideal candidate to add shares. |
| HOLD | SSG: HOLD | Quality position at fair price. No action; continue monitoring. |
| HOLD | SSG: SELL | Fundamentals intact but price near forecast high. Consider partial trim or wait for a better zone. |
| REDUCE | SSG: BUY | Contradictory: fundamentals weakening while valuation is attractive. Investigate cause before acting. |
| REDUCE | SSG: HOLD | Fundamentals weakening at fair price. Begin reduction process. |
| REDUCE | SSG: SELL | Both frameworks aligned. Strong case for selling — present for club vote. |
| EXIT | any | Fundamental deterioration is the primary driver. Initiate exit; SSG signal is secondary. |
SSG core scoring layers
These are the canonical BetterInvesting buy/sell criteria from the iclub.com SSG Sections 1–5 and the BI Beginner Guidelines. They drive the BUY / HOLD / SELL verdict.
Canonical BI SSG Section 4: the zone is the price's position in the Forecast Low → Forecast High range, split 25 % / 50 % / 25 %. Forecast High = min(5y avg high P/E, 30) × Projected EPS₅. Forecast Low = 5y avg low P/E × current TTM EPS. When forecast prices can't be computed we fall back to the 5-year P/E percentile, then to the 52-week price percentile.
RV expresses the current P/E as a percentage of the stock's own 5-year average P/E, where the average is the canonical BI midpoint (5y Avg High P/E + 5y Avg Low P/E) / 2. Below 100 means buying low; above 100 means buying high relative to history. RV above 100 downgrades a borderline BUY to HOLD.
BI's primary go/no-go metric. Project EPS forward 5 years, multiply by an estimated high P/E (capped at 30 per BI), add 5 years of dividends, then compute the CAGR back from today's price. Buy threshold is 15%+; below 10% is the BI sell threshold.
Canonical BI PEG (SSG Calculation Reference): Projected P/E ÷ Forecast EPS Growth Rate, where Projected P/E = Current Price ÷ Est EPS Next 12 Months. This is forward-looking — telling you how much you're paying per unit of expected growth. PEG ≤ 1.5 is the BI buy ceiling; above 1.5 the price is rich for the growth. PEG > 1.5 downgrades a borderline BUY to HOLD.
U/D rebased on forecast prices, not 52-week levels. Forecast High = capped 5y high P/E × projected EPS. Forecast Low = 5y low P/E × current TTM EPS. The BI sweet spot is 3:1 to 10:1 — above 10 is usually a too-pessimistic floor; below 3 is inadequate reward for the risk. Falls back to a 52-week U/D proxy when forecast inputs are missing.
A human-judgment layer. Club-specific research, meeting notes, or SSG study context from the Progressive Investors Club NotebookLM notebook can elevate to BUY, drop to SELL, or flag for further review — overriding the automated verdict when warranted.
Supplementary signals (commentary only)
The following signals are surfaced in the SSG Reasoning panel for context but do not alter the buy/sell verdict. The BI methodology is fundamentals-driven — these are useful reads, not entry/exit triggers.
| Signal | What it tells you |
|---|---|
| Trend (EMA200 / 50) | Long-term price trend and Golden/Death Cross status. Useful context for timing, but BI does not buy or sell on trend alone. |
| Dividend Yield | Current annual dividend yield. Income context, not a quality gate. |
| FCF Yield | Free Cash Flow ÷ Market Cap. A negative read is a flag for the quality screen, but cash yield doesn't drive the SSG verdict. |
| RSI / MACD | Short-term momentum oscillators. Interesting context, never zone-altering. |
Quality & Valuation Scores (1–10)
Base 5 · BI quality screen (growth, ROE, margin trend, debt)
| EPS growth in size band | +1 / +2 |
| EPS contracting (< 0%) | −2 |
| Revenue in size band bonus | +1 |
| Revenue contracting | −1 |
| Up/Straight/Parallel ideal | +1 |
| ROE ≥ 20% / ≥ 15% | +2 / +1 |
| ROE 5–10% / < 5% | −1 / −2 |
| PTP margin rising | +1 |
| PTP margin declining (BI: stop study) | −2 |
| Profit margin > 10% | +1 |
| D/E > 50% | −2 |
| D/C > 33% | −1 |
Base 5 · measures price attractiveness
| PEG < 1.0 | +2 |
| PEG 1.0–1.5 | +1 |
| PEG > 2.5 | −2 |
| PEG 2.0–2.5 | −1 |
| Forward P/E < Trailing P/E | +1 |
| Forward P/E > 120% of Trailing | −1 |
| Price-to-Book < 3 | +1 |
| Price-to-Book > 10 | −1 |
Degrading Winner Detection
A Degrading Winner is a stock the club has held for years that once drove strong returns — but whose underlying growth trajectory is now deteriorating. The danger: emotional attachment to past performance delays a rational sell or reduce decision (the Endowment Effect).
Detection uses the trailing 3–4 quarters of EPS and Revenue data. If both show consecutive deceleration, the flag is triggered.
| Condition | Flag triggered | Signal impact |
|---|---|---|
| EPS growth decelerating 3–4 qtrs | ▲ Degrading | REDUCE (if Quality ≥ 5) or EXIT (if Quality ≤ 4) |
| Revenue compressing qtrs over qtr | ▲ Degrading | Compounds EPS deceleration signal |
| Both EPS + Revenue decelerating | ▲ Degrading | Strongest case for immediate action |
Key metrics reference
| Metric | Definition | Targets & thresholds |
|---|---|---|
| EPS Growth (YoY) | Year-over-year change in earnings per share. Core BI growth indicator; thresholds adjusted by company size. | Small ≥ 12% / Mid ≥ 7–12% / Large ≥ 5–7%< 0% → contracting |
| Revenue Growth (YoY) | Confirms EPS growth has a real sales foundation. Used in size-banded BI quality screen. | In size band → bonus< 0% → contracting |
| Up / Straight / Parallel | EPS and revenue moving together (both positive, similar rate) — BI's hallmark of clean growth. | IdealEPS faster than revenue → margin sustainability flagEither contracting → quality at risk |
| Forecast High / Low Price | SSG Section 4 forecast prices. High = min(5y avg high P/E, 30) × Projected EPS₅. Low = 5y avg low P/E × current TTM EPS. Anchor the canonical BUY/HOLD/SELL zone and U/D ratio. | EPS growth capped at BI 20% ceiling |
| 5-yr P/E (Low / Avg / High) | Trailing P/E history reconstructed from monthly closes ÷ TTM EPS. Avg P/E uses the canonical midpoint (High + Low) / 2 for RV. Used as fallback zone basis when forecast prices can't be computed. | ≥ 36 monthly samples preferred for stability |
| P/E (Trailing) | Price ÷ trailing 12-month EPS. Display only — the canonical buy/sell rule lives in the Forecast Low → High price zone, not absolute P/E. | < 15 Reasonable15–25 Moderate25–40 Elevated> 40 High |
| Projected P/E | Current Price ÷ Est EPS Next 12 Months. Forward-looking P/E used as the numerator in canonical PEG. | Projected_PE = pe_ttm / (1 + g) |
| Relative Value (RV) | Current P/E ÷ canonical 5y Average P/E × 100, where 5y Avg P/E = (5y Avg High P/E + 5y Avg Low P/E) / 2. Above 100 means buying high vs the stock's own history. | < 100 → buying low ✓> 100 → BUY → HOLD |
| Total Return (5-yr CAGR) | SSG Section 5 — projected forward return: forecast high price (capped 5y high P/E × projected EPS) + 5y dividends, compounded back to today. | ≥ 15% → BI buy ✓10–15% adequate< 10% → BI sell |
| PEG Ratio (canonical) | Projected P/E ÷ Forecast EPS Growth Rate (SSG Calculation Reference). Forward-looking — how much you're paying per unit of expected growth. | < 1.0 strong1.0–1.5 BI buy ceiling ✓1.5–2.0 above ceiling → HOLD> 2.0 expensive |
| U/D Ratio (forecast) | (Forecast High − Price) ÷ (Price − Forecast Low). BI's reward-to-risk on forecast prices, not 52W levels. | 3–10 sweet spot ✓< 3 inadequate> 10 floor too pessimistic |
| Return on Equity (ROE) | Earnings per share ÷ book value (BI Quality Check). 15% is the BI minimum; ROE < 15% triggers the quality-FAIL gate and blocks BUY recommendations. | ≥ 20% great≥ 15% BI minimum ✓< 15% → FAIL gate |
| Pre-Tax Profit Margin trend | Annual PTP margin direction over multiple years. BI: declining margins = "stop study". | Rising ✓SteadyDeclining → −2 quality |
| Debt ratios (D/E, D/C) | D/C is derived from yfinance D/E (D/C = D/E ÷ (1 + D/E)). BI guidance: D/E ≤ 50%, D/C ≤ 33%. | D/E ≤ 50% & D/C ≤ 33% ✓D/E > 50% → −2D/C > 33% → −1 |
| Trend (EMA200, 50/200 cross) | Long-term trend read. Surfaced as supplementary commentary; does NOT alter the SSG verdict. | Supplementary only |
| Dividend Yield, FCF Yield | Income and cash-quality reads. Surfaced as supplementary commentary; do NOT alter the SSG verdict. | Supplementary only |
| RSI / MACD | Short-term momentum oscillators. Surfaced as supplementary commentary; do NOT alter the SSG verdict. | Supplementary only |
| Degrading Winner | Club-specific flag for held positions where EPS or revenue have decelerated for 3–4 quarters. Used in portfolio (not SSG) signal. | Triggers REDUCEQuality ≤ 4 → EXIT |
| Time | Ticker | Side | Shares | Price | Amount | Basket | Reason | Realized P&L |
|---|---|---|---|---|---|---|---|---|
| No trades yet | ||||||||