7investing’s Conviction Rating Reviews occur each month, as an opportunity to identify which stocks on the scorecard we currently have the most confidence in.

All 7investing stock recommendations will have only one of the following Conviction Ratings at any giving time:

– Best Buy
– Strong Buy
– Buy
– Hold
– Potential Sell
– Sell

Recommendations often change their current conviction rating throughout the year. We are loathe to sell a good company based on valuation alone. But if a stock begins to look a bit too frothy, it might prompt us to downgrade from a “Strong Buy” to a “Buy” or even a “Hold.”

On the other hand, the market often misinterprets conservative forward guidance as a sign of weakness. A resulting selloff — and more attractive current valuation — might be reason for us to upgrade an active recommendation to a “Strong Buy” or a “Best Buy”.

Each month, only 10% of our scorecard’s active recommendations can be tagged as a Strong Buy. And only five companies each month can be considered Best Buys.