Find me the best stocks for free

Screening Filters

1. PriceAboveMA200 (Price above 200-day moving average)

   • Purpose: Focus on stocks in a longer-term uptrend rather than those in clear downtrends.
   • Rationale: A 200-day moving average is a common indicator of a stock’s long-term trend. Requiring price to be above this line means:
     • The market currently values the stock positively.
     • You filter out many structurally weak or declining names.
     • For someone asking for the “best” stocks, it makes sense to start with companies that are not in a technical downtrend.

2. is_index_component: GSPC (S&P 500 components only)

   • Purpose: Limit results to established, large, and widely followed U.S. companies.
   • Rationale: The S&P 500 contains large, often industry-leading firms that:
     • Have stronger disclosure standards and better governance on average.
     • Are more liquid (easier and cheaper to trade).
     • Represent companies that institutions already consider among the “core” investable universe.
       This is a reasonable proxy list for “best-quality” stocks instead of tiny or speculative names.

3. net_margin ≥ 10%

   • Purpose: Ensure the companies are meaningfully profitable.
   • Rationale: Net margin measures how much profit a company makes for each dollar of sales. A minimum of 10%:
     • Filters out low-margin, struggling, or barely profitable businesses.
     • Favors companies with business models that can generate strong bottom-line results.
     • Aligns with the idea of “high-quality” or “strong” businesses that might reasonably be considered among the “best.”

4. return_on_equity (ROE) ≥ 12%

   • Purpose: Capture companies that generate attractive returns on shareholders’ capital.
   • Rationale: ROE shows how efficiently a company turns equity into profit. A threshold of 12%:
     • Targets firms with above-average profitability relative to their capital base.
     • Excludes capital-inefficient or poorly managed companies.
     • Supports the search for businesses that are not just profitable, but also good allocators of capital—often a hallmark of “quality” stocks.

5. eps_5yr_cagr ≥ 5% (Earnings per share growth, 5-year CAGR)

   • Purpose: Require consistent earnings growth over time.
   • Rationale: EPS 5-year compound annual growth rate (CAGR) shows whether profits are growing at a healthy pace. A minimum of 5%:
     • Focuses on companies expanding their profitability, not stagnating.
     • Reduces the chance of picking “value traps” that are cheap but not growing.
     • Matches the idea of “best” as not just good today, but improving over time.

6. revenue_5yr_cagr ≥ 5% (Revenue growth, 5-year CAGR)

   • Purpose: Ensure top-line (sales) growth, not just accounting-based profit growth.
   • Rationale: Revenue growth shows demand for the company’s products or services. A 5% minimum:
     • Confirms the business is actually expanding, not just cutting costs to grow earnings.
     • Filters for companies with growing market presence or pricing power.
     • Helps identify structurally healthier businesses rather than those stagnating in shrinking markets.

7. pb_ratio ≤ 5 (Price-to-book ratio)

   • Purpose: Avoid the most extremely overvalued companies by book value.
   • Rationale: Price-to-book compares market value to the company’s net assets. Capping it at 5:
     • Screens out some speculative or “bubble-like” valuations.
     • Keeps the list more grounded in reasonable valuation territory.
     • For “best” stocks, you’re aiming for quality at a sensible price, not just any price.

8. pe_ttm between 5 and 30 (Price-to-earnings, trailing twelve months)

   • Purpose: Keep valuations in a reasonable range—exclude both distressed and ultra-expensive names.
   • Rationale:
     • Minimum PE of 5: Helps avoid many distressed or potentially manipulated situations (where earnings are temporarily inflated, or the market is signaling serious risk).
     • Maximum PE of 30: Excludes very high multiple stocks that may be priced for perfection or heavy speculation.
       Together, this range targets:
     • Companies that are not “penny-value traps” nor extremely overpriced momentum names.
     • A balanced set of candidates that combine quality with somewhat reasonable valuation.

Why Results Match the User’s Request (“best stocks for free”)

• The screen focuses on high-quality fundamentals: solid profitability (net margin, ROE), consistent growth (5-year EPS and revenue growth), and membership in the S&P 500.
• It adds a technical quality layer by requiring the price to be above the 200-day moving average, favoring stocks in established uptrends.
• It enforces valuation discipline (PE and PB limits), so you’re not just getting good companies, but also avoiding many that are priced excessively.
• Collectively, these filters don’t “guarantee” the absolute best stocks, but they narrow the universe to a reasonable set of strong, growing, and not-extremely-overvalued large companies, which is a practical and professional interpretation of “best stocks.”