A New App Aims To Take The Guesswork And Anxiety Out Of Trading
To
the novice trader or even some experienced investors, the biggest
hurdle in the path of maintaining a trading career is generally the lack
of clear or consistent guidance or means of stock discovery. Broker services
like robo advisors and charting, analytics or research platforms are a
huge boon for traders who know how to read the charts and key in what
exactly they’re looking for.
But
the story’s much different for those who are just starting to dabble in
equities. And while expertise might come eventually, beginning traders
have not had institutional-quality guidance about what stocks hold the
most potential for a particular portfolio. That was the thought Appo
Agbamu had when he set out to create Ahrvo,
the first mobile app for traders that uses multi-factor ranking systems
to process market and company financial information to provide users
with easy to understand stock scores and neural network-aided smart
price target.
“I
worked at a firm my senior year of college where we used multi-factor
ranking systems,” Appo Agbamu said in a recent interview with Benzinga
about the genesis of Ahrvo. “This firm had the ability to scale their
operations and find high-caliber ideas through their multi-factor
ranking system. They were outperforming the benchmark by a thousand
basis points by the time I left [...] I thought to myself: the people
who really need these tools are retail investors who don’t have the time
and knowledge to do investment research. Moreover, a lot of people who
aren’t in the market don’t understand the underlying variables that move
stock prices.”
Appo
Agbamu saw the opportunity to give retail investors that same caliber
of insight while also making the analysis convenient and simple to read.
According to Appo, Ahrvo focuses on the four main drivers of stock
prices: valuation, momentum, quality and growth, to generate an
AhrvoScore for a particular stock.
“These
are metrics that historically you’ve had to go to income statements,
cash flow statements and balance sheets to come up with,” Appo said.
“You have to go and grab your calculator and find the net income and
divide it by your revenue and — you know what I mean. Through data
mining and abstraction, Ahrvo looks at about 40 different sub variables
that fit into those four key variables, focusing on information that has
a high correlation with future stock performance. Through that process
we come up with the AhrvoScores.”
The AhrvoScore, which rates stocks from 0 (most bearish) to 100 (most bullish), aims to be unambiguous in its grading.
“It’s very monolithic in the
persion,
it’s very black and white in the sense that if you own an 80-100, the
probability of outperforming the market increases versus owning a 0-20.”
Stocks
with AhrvoScores between 80-100 have a five-year annualized return of
18.61 percent, while AhrvoScores of 0-20 returned 7.87 percent. The
Russell 3000 with dividends has returned 15.04 percent over the same
time period.
Ahrvo
launched in January. The platform offers free trials of three
subscription tiers that each offer varying levels of access to company
profiles, analyst recommendations and price targets, earning results,
in-app trading, a practice portfolios, a wealth simulator.
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