Stock Analysis Pro — Analytical Framework

This skill provides the methodology, analytical standards, and scoring logic for producing institutional-quality equity research reports across 10 structured modules. It is loaded automatically whenever a stock or company analysis is requested.

Core Analytical Principles

Apply these principles across every module of every report:

• Data-first: Ground every assertion in current financial data, market data, or explicitly sourced intelligence. Do not make claims without evidence.
• Multi-dimensional: No single factor determines an investment case. Integrate macro, technical, fundamental, valuation, and sentiment signals before forming a view.
• Balanced: Present both bull and bear cases within each module. Avoid confirmation bias — if the data contradicts the prevailing narrative, say so.
• Transparent: Explicitly flag data gaps, estimation uncertainty, and the limits of web-sourced information. Use ⚠️ where data is unavailable or estimated.
• Actionable: Every module ends with a Key Takeaway. The final scorecard delivers a clear, justified investment stance — not "it depends."

The 10-Module Framework

Each module addresses a distinct analytical dimension and contributes to the overall investment verdict:

Scoring Logic (Module Scorecard)

Rate each module from 1 to 5 based on the analytical findings:

Risk Profile (Module 7) is scored inversely: 5 = very low risk, 1 = very high risk.

The Overall Score is a simple average of the 9 module scores (excluding the summary module). Weighting guidance:

• For short-term theses: weight Technical Trend and Catalysts more heavily
• For long-term theses: weight Macro, Company Competency, Valuation, and ESG more heavily

Investment Stance Thresholds

Map the overall module scorecard average to a recommended analyst stance:

Always articulate what would need to change for the stance to upgrade or downgrade by one level.

Data Source Hierarchy

Prioritize higher-quality sources when gathering data. Prefer recency over breadth.

1. Company SEC filings: 10-K (annual), 10-Q (quarterly), 8-K (material events)
2. Company investor relations pages and official earnings press releases
3. Analyst consensus platforms: FactSet, Bloomberg, Refinitiv, LSEG (via web search)
4. Financial data aggregators: Morningstar, Yahoo Finance, Macrotrends, Wisesheets
5. Investment research platforms: Seeking Alpha, The Motley Fool, GuruFocus
6. ESG rating agencies: MSCI ESG Ratings, Sustainalytics, S&P Global ESG
7. Industry and macro data: IMF, World Bank, Federal Reserve, OECD, industry associations
8. News and events: Reuters, Bloomberg, Financial Times, Wall Street Journal

Key Analytical Standards

Apply these standards consistently across all modules:

Financial metrics:

• Use trailing twelve months (TTM) for income statement metrics unless forward estimates are more relevant
• Compare multiples to both sector median and 3–5 year historical average for the same company
• When multiples are not meaningful (e.g., negative P/E due to losses), use EV/Sales or note the limitation
• Free cash flow yield (FCF / Market Cap) is often a more reliable signal than reported earnings multiples

Technical analysis:

• Treat indicators as confirming or diverging signals — not standalone buy/sell triggers
• RSI interpretation: >70 = overbought territory; \x3C30 = oversold territory; divergence with price direction is more informative than absolute level alone
• MACD: focus on signal line crossovers and histogram trend (expanding vs. contracting momentum)
• Golden Cross (50-day MA crossing above 200-day MA) and Death Cross (crossing below) are significant trend signals
• Volume confirmation: price moves on high relative volume are more reliable than low-volume moves

Valuation (DCF guidance):

• Use a 2-stage or 3-stage model: near-term explicit forecast period (5 years) + terminal value
• WACC should reflect sector risk: typically 8–10% for large-cap defensive, 10–14% for growth/tech, 12–16% for speculative/small-cap
• Terminal growth rate: 2–3% for stable businesses, aligned with long-run nominal GDP growth; avoid rates above 4% without explicit justification
• Sensitivity-test the DCF on WACC ± 1% and terminal growth rate ± 0.5% to show the fair value range

Risk assessment:

• Assign risk levels (Low / Medium / High) based on both likelihood and severity of impact
• A High risk designation requires at least one of: (a) high probability of occurrence, (b) potentially company-threatening consequence, or (c) a clear near-term trigger
• ESG risk should consider both the direct financial impact of ESG failings and the reputational/regulatory overhang

Reference Files

Load these reference files for deeper methodology when needed:

• references/macro-framework.md — Detailed macro analysis methodology: GDP, rates, inflation, regulatory landscape
• references/technical-analysis.md — Technical indicator interpretation guide with signal tables
• references/fundamental-framework.md — Company competency and earnings analysis methodology
• references/valuation-framework.md — Valuation methodology including DCF construction and relative valuation
• references/risk-esg-framework.md — Risk rating criteria and ESG/governance assessment standards