MIDS Capstone Project Summer 2022

StockPick Ai

Team members:

StockPick Ai is designed for Individual Investors to empower them to make sound and quick long-term investment decisions. The model predicts the "probability of stock outperforming the S&P 500" yearly. StockPick Ai chooses the top 5 performers that the investors can use to outperform the market and hedge funds, it also allows the Investors to get insight on why the top picks are predicted to outperform.

Problem

While in today's data-driven digital age, investors often have access to a broad range of information when considering long-term investments. However, the story for individual investors is not quite the same. There's a bi-fold problem where:

The current AI/Data-Driven products are either geared towards trading where the investors have to do their own research to invest or are not built for individual investors i.e. it's built for advisors to assist investors in masses.
If there exists such a service as stock ranking - morning star - which allows investors to compare and assist in sound decision making based on algorithmic analysis, and can influence the investor's decisions, they are often not transparent in sharing their techniques for calculating the rating. In addition, these kinds of services do not consider the objectives of individual investors and how the recommendations fit into their portfolios.

StockPick Ai intends to fill that gap by building an ML-based automated and transparent financial tool.

How It Works

We intend to use machine learning techniques to determine and recommend the ten best stocks in which an investor might consider investing their money. We will appropriately weight the many “features” of fundamental analysis; financial reports, SEC filings, earnings transcripts/presentations, ESG profiles, historical/forward market multiples; performance against the S&P 500 over a three to five year period, to determine a “Score” from 0 to 100 for each company. This “Score” represents how a stock ranks against the expected forward returns against the S&P 500 over a three-year to five-year period.