How Tykr's On Sale, Watch, and Overpriced Ratings Work

Updated

Tykr sorts every stock it covers into one of three labels — On Sale, Watch, or Overpriced — and the label is driven by how far the current price sits from Tykr's estimate of fair value. In practice, "On Sale" means the stock trades at a large enough discount to that fair value (Tykr points to a margin of safety of 50% or higher), "Overpriced" means the price is above fair value or the discount has shrunk below that threshold, and "Watch" is the in-between state where the stock is neither a strong buy nor clearly expensive. The rating is a screening and alerting tool, not a guarantee, so it works best as a first filter before you do your own research.

The three ratings and what each one signals

Rating What it reflects What Tykr suggests you do
On Sale Price is well below Tykr's fair value estimate; margin of safety is high (50%+ is the stated buy signal) Consider buying — these are framed as "the top stocks in the market"
Watch Price is near fair value, or the discount isn't large enough to qualify as On Sale Hold off and monitor; add to a watchlist and wait for a rating change
Overpriced Price is above fair value, or the margin of safety has fallen below 50% Avoid buying, and consider taking profits if you already own it

The logic is deliberately simple: the bigger the gap between price and fair value, the better the rating. Tykr describes the system as "traffic light-inspired," which is why the three states map cleanly onto buy / wait / avoid.

Where fair value and margin of safety come from

Two numbers do the work:

  • Fair value — Tykr's estimate of what the stock is actually worth. The rating compares the live price against this figure.
  • Margin of safety — the cushion between price and fair value. Tykr's stated rule is to look for a margin of safety of 50% or higher, meaning the stock is trading at roughly half (or less) of its estimated worth. When the margin of safety drops below 50%, Tykr flags the stock as overvalued.

So the rating isn't a vague sentiment score — it's a threshold test on the discount. A stock can move from On Sale to Watch to Overpriced purely because its price rose (or its fair value estimate fell), even if nothing about the underlying business changed.

How the ratings turn into buy and sell decisions

Tykr frames the system around two questions: know when to buy and know when to sell.

Buying: Screen for stocks rated On Sale, confirm the margin of safety is at or above 50%, then check the stock against your own criteria before acting. Tykr's custom filters let you narrow the universe first so you're not scrolling through thousands of names.

Selling: Watch for a stock you own flipping to Overpriced, or its margin of safety falling below 50%. That's the signal to review the position and consider taking profits rather than waiting for a pullback.

Staying hands-off: Anything rated Watch goes on a watchlist. Tykr notifies you when the rating changes, so you don't need to re-check manually.

Alerts do the monitoring for you

The rating system is paired with two automatic notifications:

  • Opportunity Alerts — fire when a stock changes to On Sale, so you hear about new buy candidates without screening daily.
  • Risk Alerts — fire when a stock changes to Overpriced, so you get a warning before a position becomes expensive.

Watchlist ratings also trigger notifications when they change. For a beginner, this is the practical payoff: you set up the list once and let the rating changes tell you when to look.

A concrete example

Say a stock trades at $100 and Tykr estimates fair value at $200. The margin of safety is 50%, so it lands in On Sale and you'd consider buying. If the price climbs to $150, the discount shrinks to 25% — below the 50% threshold — and the rating moves to Watch or Overpriced depending on where it sits relative to fair value. You'd get a Risk Alert on the downgrade, prompting you to reassess rather than keep adding. Nothing about the company changed; only the price-to-value gap did.

What the ratings don't do

The three labels are a screening shortcut, not investment advice. Fair value is an estimate, and a stock can be "On Sale" because the market expects trouble — a low price relative to estimated value is a starting point for research, not a conclusion. Tykr's own framing is about building confidence and knowing where to start, and the site offers a free trial with a 30-day money-back guarantee, so you can test whether the ratings match how you think before committing. Treat On Sale as "worth investigating," Overpriced as "worth reviewing," and Watch as "not yet."