Any mid cap or small cap undervalued

Screening Filters

1. Market Cap: 300M – 10B USD

   • Purpose: Target U.S. small-cap and mid-cap companies.
   • Rationale:
     • “Small cap” is commonly around 300M–2B and “mid cap” around 2B–10B.
     • Setting a minimum of $300M avoids very illiquid micro-caps and the highest-risk penny stocks.
     • Setting a maximum of $10B excludes large caps, keeping the focus on the size range you requested.

2. Exchange Listing: XNYS, XNAS, XASE (NYSE, NASDAQ, NYSE American/AMEX)

   • Purpose: Limit results to established U.S. exchanges.
   • Rationale:
     • “US market” is interpreted as major U.S. stock exchanges.
     • NYSE (XNYS), NASDAQ (XNAS), and NYSE American/AMEX (XASE) capture the bulk of U.S.-listed small/mid caps with better reporting and liquidity than OTC or foreign exchanges.

3. Net Margin ≥ 10%

   • Purpose: Ensure the companies are consistently profitable, not just cheap.
   • Rationale:
     • A net margin of at least 10% filters out low-quality, barely profitable, or loss-making businesses.
     • This aligns with looking for undervalued, not just “low-priced” or distressed, stocks—reducing the chance of pure value traps.

4. Return on Equity (ROE) ≥ 12%

   • Purpose: Focus on companies that use shareholder capital efficiently.
   • Rationale:
     • ROE ≥ 12% is generally considered a sign of above-average business quality.
     • Combining profitability (net margin) with solid ROE finds firms that are both earning good profits and generating decent returns on equity—again, supporting the idea of “good businesses that might be undervalued.”

5. P/E (TTM) between >0 and 10

   • Purpose: Identify stocks trading at low earnings multiples.
   • Rationale:
     • A low P/E is a classic valuation measure for “undervalued” stocks.
     • The maximum of 10 is quite conservative, focusing on the cheaper end of the market.
     • The minimum above 0 excludes companies with negative earnings or nonsensical ratios, which are hard to assess as “undervalued” in a traditional value-investing sense.

6. P/B (Price-to-Book) between >0 and 1.3

   • Purpose: Target stocks trading close to or below their book value, another key value metric.
   • Rationale:
     • A P/B ≤ 1 often indicates the market is pricing a company at or below its net asset value—typical in deep value situations.
     • Allowing up to 1.3 gives some flexibility to include slightly higher-quality names that still trade at low valuations relative to their balance sheet.
     • The minimum above 0 avoids broken or extreme outliers.

Why Results Match Your Request

• “Mid cap or small cap”:

  • Addressed by the market cap filter (300M–10B), which lines up with standard definitions of small and mid caps.

• “In the US market”:

  • Addressed by the exchange filter (XNYS, XNAS, XASE), restricting to primary U.S. exchanges.

• “Undervalued”:

  • Addressed by low P/E (≤10) and low P/B (≤1.3), both classic value metrics that look for stocks trading cheaply relative to earnings and book value.
  • Backed by profitability and quality filters (net margin ≥10%, ROE ≥12%) to focus on companies that are cheap relative to their fundamentals, not just weak or distressed.

Together, these filters are structured to surface profitable, reasonably high-quality U.S. small- and mid-cap companies trading at low valuation multiples, which aligns with your interest in “undervalued” names in that segment of the market.