What BUY, HOLD, SELL Signals Mean
Beyond scores, we provide simple signals to help guide your decisions. Let's understand what they mean.
The Three Signals
🟢 BUY Signal
What it means: The stock appears undervalued with solid fundamentals.
Typical characteristics:
- High Valuation Score (cheap)
- Good Quality Score (solid business)
- Acceptable Growth and Health
What to do: Consider for purchase after your own research.
🟡 HOLD Signal
What it means: The stock is fairly valued or has mixed signals.
Typical characteristics:
- Average Valuation Score
- Mixed pillar scores
- No clear buy or sell case
What to do: If you own it, consider holding. If you don't, probably pass.
🔴 SELL Signal
What it means: The stock appears overvalued or has concerning fundamentals.
Typical characteristics:
- Low Valuation Score (expensive)
- Weak Quality, Growth, or Health scores
- Red flags present
What to do: Consider selling if owned, avoid if not.
Traffic Lights
Just like traffic lights:
- 🟢 Green = Go (but still look both ways)
- 🟡 Yellow = Caution (slow down, assess)
- 🔴 Red = Stop (don't proceed without good reason)
Signals guide you, but you still need to pay attention to the road.
How Signals Are Determined
Signals are based on the Final Score and pillar breakdown:
| Final Score | Typical Signal | Conditions |
|---|---|---|
| 70+ | BUY | No major red flags |
| 50-69 | HOLD | Mixed or average metrics |
| Below 50 | SELL | Weak fundamentals or overvalued |
But it's not just the score. We also consider:
- Individual pillar scores (one very low score can override)
- Sector context
- Risk factors
Key Takeaways
- BUY = undervalued with solid fundamentals
- HOLD = fairly valued or mixed signals
- SELL = overvalued or weak fundamentals
- Signals are guides, not commands
Signal Nuances
Strong BUY vs. Moderate BUY
- Strong BUY: Score 80+, all pillars solid
- Moderate BUY: Score 70-79, mostly good with minor concerns
HOLD Variations
- Bullish HOLD: Leaning positive, might upgrade
- Neutral HOLD: Truly mixed
- Bearish HOLD: Leaning negative, might downgrade
SELL Intensity
- Moderate SELL: Overvalued but not terrible
- Strong SELL: Significant concerns, avoid
What Signals DON'T Mean
❌ BUY ≠ "Will definitely go up"
Even great stocks can decline short-term. BUY means attractive risk/reward, not guaranteed returns.
❌ SELL ≠ "Will definitely go down"
Overvalued stocks can stay overvalued or go higher. SELL means unfavorable risk/reward.
❌ Signals ≠ Timing
We don't predict WHEN prices will move, only whether current prices seem attractive.
Important Disclaimer
ShareValue.ai signals are for informational purposes only. They are not personalized financial advice. Always do your own research and consider consulting a financial advisor.
Using Signals Wisely
For Screening
Use signals to filter your universe:
- Focus research on BUY signals
- Avoid wasting time on SELL signals
- Investigate interesting HOLD signals
For Portfolio Review
Check signals on stocks you own:
- BUY signal on owned stock = continue holding
- SELL signal on owned stock = consider selling
- HOLD signal = monitor for changes
For Watchlist
Track signal changes:
- HOLD → BUY = potential entry point
- BUY → HOLD = maybe take profits
- Any → SELL = warning sign
Signal Changes
Signals can change as:
- Stock prices move (affecting valuation)
- New financial data is released
- Sector dynamics shift
Check regularly but don't overreact to daily changes.
Signal Traps
- Treating signals as guarantees
- Ignoring signals that contradict your opinion
- Acting on signals without additional research
- Checking signals too frequently (daily changes are noise)
Next up: Momentum—the fifth factor that influences signals.