How Zen Alpha ranks the investable universe
ZenRank is a systematic scoring model I built to evaluate stocks across five dimensions:
- Quality
- Value
- Momentum
- Growth
- Risk
Every stock in the coverage universe (roughly 2,500 names) is scored against its sector peers on each factor, and those scores combine into a single composite called the ZenRank.
Why rank a stock against its peers and not against the whole market?
A utility and a software company don't play by the same rules. A "good" margin or growth rate looks completely different depending on the industry. ZenRank scores each stock against its own sector peers, not the market as a whole, so the comparison is apples-to-apples.
The five factors explained
Quality: how efficiently and consistently a company generates profit and cash flow, compared to its sector peers.
Value: how a stock is priced relative to its fundamentals, compared to its sector peers.
Momentum: is the stock in an uptrend, and how strong is that trend compared to its sector peers.
Growth: the trajectory of the underlying business, compared to its sector peers.
Risk: volatility and downside characteristics, compared to its sector peers.
No single factor drives the rank. A stock has to hold up across multiple dimensions to score well — the system can forgive a slight transgression in one of the five dimensions, as long as the stock makes up for it in stellar marks elsewhere.
Systematic, not Random
There's no manual override on the scoring itself, no "gut feel" adjustment to a stock's rank. The model computes every score the same way for every stock, every time. Some discretion still exists around how and when the model's outputs get acted on — but the scores themselves are never nudged based on opinion or headlines.
Risk-first by design
The model isn't built to just chase the highest possible return — it's built with the belief that avoiding large losses matters more to long-term compounding than catching every rally. That shows up in how heavily quality and risk factor into the composite, and in the broader Zen Alpha portfolio construction (sector balance, regime-based cash allocation) that ZenRank feeds into.
Where ZenRank came from
I built this ranking system after 30 years on the buy-side, including running equity trading at Northern Trust. ZenRank is the systematic distillation of the same discipline I applied managing institutional portfolios — just built to run at scale across the full market, all the time.