Ranking a Ranking System

Research
1

I’m just starting to learn P123, so I am guessing this question has an obvious answer that I am unable to find.

I am trying to re-create this strategy: https://www.quant-investing.com/strategies/magic-formula-pi-6m

I have created a ranking system for the main factors:
50% weight: (Eval(EBITTTM<0,NA, EBITTTM)) /EV
50% weight: (Eval(EBITTTM<0,NA, EBITTTM)) / ( WorkCapTTM + AstNonCurOtherTTM)

I think I have those formulas correct, but let me know if I messed up somewhere.

Now I am trying to figure out how to take the top 20% of companies as ranked by that system, and then rank them based on 6-month price momentum, choosing the top 10 or 25. How do I do that?

2

The ranking system looks good. We usually advise people to use OpIncTTM rather than EBITTTM, but there’s not much difference. See the documentation here: https://www.portfolio123.com/doc/doc_detail.jsp?factor=OpInc&popUpFullDesc=1

Let’s say you call this ranking system MagicFormula. Now create a screen and in the “Settings” tab choose a universe and in the Ranking window choose “Quick Rank.” In the window that says “Quick Rank Formula” type in TotalReturn26W. In the “Max # of Stocks” window put 10 or 25. Then go to the “Rules” tab. Type Rating (“MagicFormula”) > 80 as your rule. Your screen is now ready and it will do exactly what you wanted it to do.

3

Thanks very much Yuval!

4

Hello,

If I try to write (“Basic: Quality”) > 80 in a screener for the russell 1000 and it still returns 986 stocks.
It happens as well creating a universe with the same rule.

am I missing something?

thanks in advance.

5

Are you typing "rating " before it?