Screening Filters
is_index_component: GSPC (S&P 500 companies)
- Purpose: Limit the universe to companies that are part of the S&P 500 index.
- Rationale:
- The S&P 500 contains large, established U.S. companies with stricter listing and index-inclusion standards.
- For long‑term investing, these tend to be more stable, better‑governed businesses with stronger disclosure and liquidity than small or micro caps.
- This aligns with a long‑term, core-portfolio approach rather than speculative stock picking.
debt_equity: max 1.0 (Debt-to-Equity ≤ 1)
- Purpose: Exclude companies that are highly leveraged (too much debt relative to their equity).
- Rationale:
- High debt can be dangerous in downturns: interest costs become a burden, refinancing risk rises, and bankruptcy risk increases.
- A debt/equity ratio ≤ 1.0 favors companies with more conservative balance sheets, which is important for surviving recessions and compounding over many years.
- This supports the user’s interest in long‑term durability rather than short‑term upside.
return_on_equity: min 12 (ROE ≥ 12%)
- Purpose: Focus on businesses that generate strong profits relative to shareholder equity.
- Rationale:
- ROE is a key measure of how efficiently a company turns shareholders’ capital into profits.
- A 12%+ ROE is generally viewed as a sign of a high‑quality or at least above‑average business.
- Over long periods, companies with consistently high ROE tend to compound shareholder value more effectively, matching the goal of long‑term wealth accumulation.
eps_5yr_cagr: min 7 (5‑Year EPS Growth ≥ 7% annually)
- Purpose: Ensure the company has a solid track record of growing earnings per share over the past five years.
- Rationale:
- Long‑term stock returns are heavily driven by growth in earnings.
- A minimum 7% compound annual growth rate in EPS suggests the business is expanding faster than inflation and the broader mature-economy average.
- This helps identify companies that not only are profitable today but have demonstrated the ability to grow, which is crucial for multi‑year or multi‑decade investing.
pe_ttm: min 5, max 35 (P/E Ratio between 5 and 35)
- Purpose: Filter out stocks that are either extremely cheap (potentially distressed) or extremely expensive (potentially speculative).
- Rationale:
- A P/E below ~5 can signal serious problems (cyclical collapse, one‑off gains, or market expecting earnings to fall).
- A P/E above ~35 often indicates very high growth expectations already priced in, which raises valuation risk for long‑term investors if growth slows.
- Keeping P/E in a moderate range aims to balance paying a fair price for quality and growth without reaching into deep‑value distress or bubble-like valuations.
Why the Results Match the User’s Goal (Long-Term US Investing)
- The S&P 500 filter keeps you in the realm of large, established U.S. companies suitable as core long‑term holdings.
- The debt limit screens for financially resilient businesses less likely to be crippled by recessions or rate hikes over a long horizon.
- The ROE threshold targets companies that efficiently generate profits from their capital, a hallmark of quality compounders.
- The EPS growth requirement looks for a proven history of growing earnings, which is key for long‑term capital appreciation.
- The P/E range helps avoid the extremes of speculative overvaluation and possible value traps, aiming for a reasonable balance between quality, growth, and price.
Together, these filters are designed to surface financially solid, profitable, growing, and reasonably valued U.S. large-cap companies, which are well aligned with a long‑term investment approach.
This list is generated based on data from one or more third party data providers. It is provided for informational purposes only by Intellectia.AI, and is not investment advice or a recommendation. Intellectia does not make any warranty or guarantee relating to the accuracy, timeliness or completeness of any third-party information, and the provision of this information does not constitute a recommendation.