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How Tickmark works

Where every finding comes from, how it is found, what it cannot tell you, and what we tried that did not work.

The rules

What did not work

Tickmark started as a set of stock signals. Before showing them, we tested whether they predicted returns: 50 large companies, every month-end from January 2015 to June 2026, each signal rebuilt from only the filings available on that day, and the return over the next 3, 6 and 12 months compared with the S&P 500 (SPY).

The test has limits: 50 of today's survivors (none went bankrupt, which is when accounting flags should matter most), and few independent events. It is enough to say these are not reliable signals, so they are shown as facts to read, not as reasons to trade.

How each finding is made

New risk factors
A paragraph of this year's Risk Factors (10-K item 1A) is new when no paragraph of last year's shares at least half of its words, with digits ignored. Edited paragraphs are not counted as new. It cannot tell an important new risk from new wording of an old one.
Accounting checks
Six checks on the latest 10-K's XBRL and the 8-Ks: receivables or inventory growing more than 10 points faster than revenue, cash from operations below net income (not for banks and insurers), an auditor change (8-K item 4.01 or a new name in the 10-K), going concern language, and a restatement (8-K item 4.02). Each is a reason to read the filing, not a finding of wrongdoing.
10-K change
Risk Factors, MD&A, Legal Proceedings and the accounting policies note, compared with last year's 10-K paragraph by paragraph, with digits masked so new years and amounts in an unchanged sentence do not count.
Revised numbers
A number in a 10-K (revenue, operating income, net income, cash from operations, total assets, equity, receivables, inventory) that a later 10-K reports differently for the same year and line item, by 0.5% or more, fiscal years of the last 6 years. It is a restatement only when the company filed an 8-K item 4.02; otherwise it is a recast (a business sold, a new accounting rule, amounts moved between lines). The later 10-K's notes say which.
Said vs did
Targets are read from the sentences of the earnings releases (8-K item 2.02, exhibit 99) of the last 3 years, such as "expects full year revenue of $45.8 billion to $46.2 billion", and compared with the number later reported in the 10-Q or 10-K for the same period, as first reported. Company-defined measures (adjusted EPS, free cash flow) have no standard number and are not scored. Targets given only in tables are not read yet.
Targets dropped quietly
A full-year target is marked dropped when the next earnings release (at least 45 days later, before that year ended) gives other targets for the same year but has no outlook sentence about this one and does not say the guidance is unchanged. This is deliberately strict, so it finds few cases; a target that moved into a table can still look dropped, so read both releases.
Adjusted vs GAAP
GAAP and adjusted earnings per share as each earnings release states them in words, usually in the highlights, with both sentences linked. We do not compute or adjust anything: the company decides what "adjusted" leaves out, and we quote its own sentence saying what. Quarters where the numbers appear only in a table are not shown.
Top officer changes
8-Ks with item 5.02 are read for the CEO, CFO, COO and chief accounting officer. A role counts only when the sentence moves someone into or out of it ("will resign as Chief Executive Officer"), not when it is mentioned in passing ("reporting to the Chief Executive Officer"). The first such sentence is quoted.
Segment changes
The latest 10-K's own sentence saying its reportable segments were realigned, quoted, and the segments with revenue in its XBRL compared with those of the 10-K before it. After a change, past years are usually recast, so growth by segment is not comparable with what earlier reports showed.
SEC comment letters
The staff's letters (form UPLOAD) and the company's answers (CORRESP) of the last 20 years, matched by their numbered questions and grouped into reviews. SEC publishes them at least 20 business days after a review ends, so they are never current. A question is not an accusation.
Insider trades and institutional owners
Form 4s as filed (an open-market purchase is code P; grants, exercises and plan sales are shown as such). 13F holdings are quarterly and filed up to 45 days after the quarter, so they are always at least that old.
The shape on the home page
Five sides, each from 0 to 100 against every other company we cover. Growth: the rank of sales growth in the last fiscal year. Profit: the rank of net margin. Balance sheet: the rank of debt to equity, less is better, and equity below zero counts as the weakest. Clean books: the share of the six accounting checks above that are clear. Insiders: 60 when insiders bought shares on the open market in the last 90 days, plus 40 when a superinvestor holds the stock. A side with no number is drawn at the centre. Banks and insurers borrow by design, so their balance-sheet side is small. The shape describes the filings; it is not a rating and not advice. On a company's Overview the shape is drawn over the median of its peer group, and each number below it shows every company of the group as a dot, ordered so the right end is the better one (more growth and margin, less debt, a lower P/E).
The three health cards on a company's Overview
Each tick is one fixed rule on the numbers above; a rule without its numbers is left out, not failed. Profitability: net margin at or above the peer group's median; gross margin up over five years (or as many as there are, at least three); return on equity of 15% or more; a profit in every fiscal year shown. Balance sheet: operating income at least 5 times interest expense; debt smaller than equity (equity below zero fails); current ratio of 1 or more; more cash than debt, or net debt under 3 years of free cash flow. Cash and shareholders: free cash flow positive in every year shown; fewer diluted shares than five years before; a higher dividend per share than five years before (left out when there is no dividend); cash from operations at least net income in the last year. The count on each card is how many rules hold. It is not a score and not advice.
Where each dollar goes, and what the debt is made of
Bands whose width is the money. Sales: revenue by product, segment or region from the 10-K's segment tables, into gross profit and cost of revenue, then net income, operating costs, and interest, tax and other items, from the income statement of the last fiscal year. Shown only when net income is positive and below gross profit. Debt: long-term debt, the part due within a year and short-term debt as tagged on the balance sheet, on the left; the principal due each year from the debt note's maturity schedule on the right. Leases are not counted. Below it, the debt note's own lines from the 10-K's XBRL, as the company tags them (by issue, year, currency or kind), with the stated or weighted rate tagged for each. Fixed or floating comes only from the line's own name ("fixed-rate notes", "floating rate notes", "term loan", "commercial paper"); a line whose name says neither is "not stated". Lines from two ways of cutting the same debt can overlap, so they are not added up, and a line that equals the others added up is marked as their total. Years: the flow is drawn for each of the last five fiscal years; revenue by part only where the last two 10-Ks' segment tables reach.
Who owns it, and what the price paid
Institutions: shares held by every 13F filer in the latest quarter over shares outstanding (13Fs are up to 45 days old). Superinvestors: the followed investors who hold it. Insiders: Form 4 rows of the last twelve months coded P (bought) and S (sold), shares times price; grants, exercises and gifts are left out. 13D filers: Schedule 13Ds of the last twelve months. Valuation by year (only with licensed prices): the close on or just before each fiscal year end over that year's diluted EPS, revenue per diluted share and free cash flow per diluted share. A multiple, not a fair value.

Known limits

Mistakes

When something is wrong, use Report a mistake at the bottom of any page. Every confirmed mistake is listed, with what changed, in the corrections log.