7 factors · 0–100 score · No signup required
Should I Sell This Stock?
Answer 7 key questions — thesis integrity, valuation vs fair value, portfolio concentration, opportunity cost, earnings trend, momentum, and tax impact — and get a structured HOLD, REVIEW, or SELL verdict with a 0–100 score and 2-sentence rationale.
Factor 1 of 7 · Weight: 30 pts
Is your original investment thesis still valid?
The reason you bought — is the core business case intact?
Factor 2 of 7 · Weight: 20 pts
How does the current price compare to your fair value estimate?
Enter how far above/below fair value the stock trades (+ = over, − = under). Run a DCF →
Factor 3 of 7 · Weight: 10 pts
What percentage of your portfolio is in this position?
Positions over 20% are flagged for concentration review.
Factor 4 of 7 · Weight: 10 pts
Is there a clearly better use of this capital right now?
A genuinely higher-conviction alternative, not just a feeling.
Factor 5 of 7 · Weight: 15 pts
What is the recent earnings trend?
Based on last 2–3 quarters. Check earnings quality →
Factor 6 of 7 · Weight: 10 pts
Is recent price momentum aligned with your thesis direction?
E.g. stock rising when you expect growth, or vice versa. Divergence is a yellow flag.
Factor 7 of 7 · Weight: 5 pts
Are you inside the 1-year short-term capital gains window?
Short-term gains are taxed as ordinary income. This is context, not a hard blocker.
0 of 7 factors answered
How the scoring engine works
7 factors, each weighted
Thesis integrity (30 pts) anchors the model — a broken thesis is the single strongest sell signal. Valuation vs fair value (20 pts) and earnings trend (15 pts) are the next heaviest factors. Position size, opportunity cost, momentum alignment, and tax context round out the remaining 35 pts.
0–100 score with zone thresholds
70–100 = HOLD (green zone). 40–69 = REVIEW (yellow zone). 0–39 = SELL (red zone). The score bar shows where your inputs land relative to the thresholds. Each factor contributes independently — a single broken factor shifts the score, not a binary rule tree.
Verdict + rationale
The verdict card identifies which factors drove the score — whether that's a broken thesis, overvaluation, deteriorating earnings, or concentration drift. The 2-sentence rationale is designed to be shareable: send it to an advisor, a spouse, or your own investment journal.
CTAs route to the right tool
After the verdict, contextual links take you directly to a DCF to verify fair value or an Earnings Quality Score check — with your ticker pre-filled if you entered one. The goal: close the loop between the sell decision and the analytical work that justifies it.
Why most sell decisions go wrong
The two failure modes
Retail investors make sell mistakes in exactly two directions: panic-selling at bottoms driven by loss aversion, and holding losers far too long because of the sunk cost fallacy. Neither error is about information — both are about emotion overriding analysis. A structured scoring framework forces separation of the two.
This tool is built around the insight that sell decisions need a checklist, not a feeling. By rating seven factors independently and summing them into a score, it removes the temptation to anchor on any one signal — good or bad — and ignore the rest.
Thesis integrity: the heaviest factor
The original investment thesis is why you bought the stock. It might be: “dominant market position with expanding margins”, “turnaround with a new CEO”, or “deep value with a catalyst.” When that thesis is intact, the case for holding is strong even with other headwinds. When the thesis has broken — the catalyst didn't happen, margins are compressing, the competitive moat narrowed — the case for holding evaporates regardless of the price action.
Thesis integrity gets 30 pts in this model for one reason: it is the only factor that cannot be hedged. You can trim a concentrated position. You can wait for a tax-efficient holding period. You cannot un-break a broken thesis by holding longer.
Valuation vs fair value
A stock can be fairly valued — or even cheap — and still be a sell candidate if the thesis has broken. Conversely, a stock trading above fair value is not automatically a sell if the thesis is intact and earnings are accelerating. Valuation is context, not a standalone trigger.
This factor scores 20 pts and uses a graduated scale: stocks trading more than 25% above your fair value estimate score 0 on this factor; those at or below fair value score the full 20. Use the DCF Calculator to anchor your fair value estimate before scoring this factor.
Earnings quality as an early warning
Deteriorating earnings quality often precedes fundamental deterioration by one to two quarters. When a company sustains reported earnings through rising accruals, aggressive revenue recognition, or declining cash conversion, the headline EPS number is living on borrowed time.
An improving earnings trend scores the full 15 pts. Flat/mixed scores 8. Deteriorating scores 0. Combined with overvaluation, a deteriorating earnings trend is one of the strongest configurations for a SELL verdict in this model.
Common questions
How do I know when to sell a stock?
Sell when the original investment thesis has fundamentally changed — not because of price drops or market noise. Three questions to ask: (1) Would I buy this at the current price if I didn't already own it? (2) Has the business deteriorated or just the sentiment? (3) Is the valuation now pricing in a best-case scenario with no margin of safety? If yes to any of these, reassess.
What does a score of 40–69 (REVIEW) mean?
Mixed signals. Not a clear hold, not a clear sell. This range typically means one or two factors are negative (often overvaluation or a partially-broken thesis) but the core business hasn't deteriorated catastrophically. The right move: run a fresh DCF, check the earnings quality score, and revisit in the next earnings cycle before deciding.
Should I sell a stock that's down 30%?
A 30% loss alone is not a sell signal. The question is whether the thesis is still intact. If the business is performing as expected and the selloff was sentiment-driven, holding is likely correct. If the business has deteriorated — declining revenue, compressing margins, weakening earnings quality — the loss is signaling real damage and holding compounds the mistake. Score all seven factors, not just the price action.
What is the 20% portfolio concentration flag?
When a single position exceeds 20% of a portfolio, a 50% drawdown wipes 10% of total portfolio value. This tool flags positions above 20% for review. It doesn't force a sell — but it forces an intentional decision about whether the outsized position reflects genuine conviction or passive drift from price appreciation.
How does tax impact factor into the score?
The tax factor carries only 5 pts — it is context, not a hard signal. Being inside the 1-year short-term gains window means selling triggers ordinary income rates instead of the lower long-term capital gains rate. That matters. But it should never be the primary reason to hold a position where other factors signal SELL. Tax tail should not wag the investment dog.