The textbook method works like this: project the company's future earnings, discount them back to today, and the resulting number is the stock's "intrinsic value." It sounds rigorous, but in practice the method has a serious weakness — it requires too many subjective inputs. How fast will the company grow over the next decade? Where will its profitability settle? What discount rate will you use? Small differences in the answers change the result dramatically. Two analysts looking at the same company arriving at one fair value of TL 100 and another of TL 250 is a routine occurrence.

We take a different approach. Rather than trying to derive a stock's value from an abstract calculation, we measure it by comparing it to other stocks. The question we ask is not "What is this stock worth in absolute terms?" It is "How does this stock stack up against the others in the BIST universe — by profitability, by valuation relative to fundamentals, by momentum, by balance-sheet strength?" This approach depends far less on forecasting and far more on observable data.

Over the past forty years, hundreds of academic finance studies have asked one question: "Which types of companies have, historically, generated higher returns than others?" The findings have converged on six themes: profitability, valuation relative to fundamentals, investment discipline, momentum, the direction of the balance sheet, and the health of market attention on the stock.

But we don't select a characteristic just because "it worked in the past." We require it to have an economic story behind it. A profitable company should have a credible reason for outperforming on average over the long run. A company that deploys its capital with discipline should have an economic explanation for delivering higher returns than its profligate competitor. When that explanation exists in theory, we use the factor. When it doesn't — when something simply "worked on the data" — we don't.

It can be read in two different ways, both legitimate:

• "I expect this stock to deliver higher returns in the coming period." That is: there are substantive reasons to expect a better payoff for the risk you take.
• "This stock is currently priced below where it should be." That is: the market has overlooked this stock for some reason; the price sits below what it deserves.

You are reading the same ranking through two different frames. Which one you favor is a matter of view; the ranking itself doesn't change.

Our model is biased toward solidly-grounded, profitable, reasonably-priced companies. That is a strength — but it is also a constraint. Consider companies like NVIDIA or Google: their value today comes not from current earnings but from the growth potential they may reach ten or twenty years from now. The measures we use cannot fully capture this type of stock — because their source of value lies not in today's numbers but in possibilities about the future.

So here is what we are saying: SmartSkor is a reliable guide for the vast majority of BIST stocks. But if a stock carries a "this company will change the future of an industry" type of story around it, recognize that our model may not be able to fully evaluate it. Our score is not a standalone buy-or-sell decision — it is a reference point you place alongside your own analysis.