The MOATEY Matrix
How we rate every stock — on two axes, with no black boxes.
The MOATEY Matrix is the visual heart of our methodology. Every stock in our universe is plotted on a five-by-five grid: fundamentals on the vertical axis, valuation on the horizontal. The intersection produces one of five ratings.
The two axes
Fundamentals (vertical) measures business quality across four pillars: growth, financial health, management, and competitive advantage. We score each pillar from a battery of academically validated metrics — Altman Z-Score for bankruptcy risk, EPV-vs-NRV for moat strength, 5-year CAGRs for growth trajectory. The maximum is 65 points.
Valuation (horizontal) measures whether the price you pay today gives you a margin of safety. We use a discounted cash flow model — sometimes EPS-based, sometimes free-cash-flow-based, sometimes residual income — to estimate intrinsic value. The score reflects how far the current price is from that estimate.
The five ratings
- Excellent — high-quality business at an attractive price. The ideal long-term holding.
- Good — strong business at a fair valuation. The bread and butter of compounding.
- Fair — acceptable quality and price. Requires conviction and patience.
- Poor — fundamentals do not yet support an investment thesis.
- Risky — excellent business, but the price leaves no margin of safety. Quality without value protection.
The 20-year backtest
MOATEY is not a hypothesis — it is a tested algorithm. Across the NIFTY 500 over 17.5 years, an Excellent-only portfolio produced a 19.01% gross CAGR versus a 12.11% benchmark. The S&P 500 backtest spans 20 years with comparable outperformance.
The framework was developed and validated at Tilburg University. We do not believe in stock tips or hot picks. We believe in transparent, evidence-based ratings — and in giving you the reasoning behind every one.