Investability Quotient - IQ

When you take an IQ test, you fill in some little bubbles with a number-two pencil, showing off your vocabulary and your ability to notice patterns in various shapes.

Stocks, on the other hand, don't really have to worry about analogies and pattern recognition. Instead, they get tested for a different kind of IQ...Investability Quotient. It's a measure created by the ratings firm Standard & Poor's. Just as your IQ test tries to predict how well you'll do in life by measuring your intelligence, S&P's version of IQ looks to anticipate a stock's investment prospects.

The IQ figure attempts to quantify a stock's potential upside and the risks associated with betting money on the shares. S&P then boils down this information into a single number, ranging from zero to 250 (zero being a bad score and 250 being the best possible).