Our tools stand on two legs, being (1) our founder’s investment experience; and (2) our technology.
Investment methodology
We align the investment strategy of our algorithms and AI learning models to the growth investing methodology, which means that stocks selected by our algorithms must demonstrate profit growth. In our experience, exceptional profit growth generally drives substantial price appreciation.
Growth investors tend to favour smaller, younger companies poised to expand and increase in valuation and profitability as time goes by. Such companies tend to be more innovative compared to larger, more established companies.
- historical earnings growth
- revenue growth
- profit margins
- returns on equity (ROE)
- share price performance
Example: 1909 (Fire Rock)
| EPS Growth | Sales Growth | |
|---|---|---|
| 2020-06-30 | +212.99% | +177.33% |
| 2020-03-31 | +212.99% | +177.33% |
| 2019-12-31 | +178.77% | +108.71% |
| 2019-09-30 | +178.77% | +108.71% |
| 2019-06-30 | +60.41% | +58.52% |
| 2019-03-31 | +71.70% | +61.15% |
Resulting stock price gain from February to May 2021: ~100%
Contrast this with the Hang Seng Index, which saw only a 3-4% gain in the same period.
Our technology
Each day, the Percival Core engine collects, analyses and quantifies the latest fundamental and technical (price/volume) data for all Hong Kong stocks from the Hong Kong Stock Exchange.
Using machine learning, Percival Core then selects "high-growth stocks" with strong fundamental and technical characteristics (i.e. potential for substantial price increase).
Percival Core provides an automated way to select stocks amongst the universe of stocks, avoiding emotional impact on stock selection.
Whilst stock selection using fundamental and technical data can be accomplished using fixed criteria and set algorithms, equity markets evolve and correlations between sets of data may erode or strengthen over time.
The AI module that Percival Core incorporates today enables the engine to undertake supervised learning and continue to select stocks based on an evolving set of criteria that continues to correlate with real value gains despite changes in equity market trends cycles.
The learning is supervised by our founder, Percival Ho, who has over 18 years of experience in profitable trading using the growth investment strategy.
In addition to correlating data sets, our AI engine is able to recognise chart patterns (including cup with handle, double bottom and flat base formations). We will be rolling out this function to our subscribers so you have an additional reference for your research and investment strategies.