Good long term investments

Screening Filters

1. Market Cap ≥ $30,000,000,000 (Large Cap)

   • Purpose: Focus on large, established companies.
   • Rationale: For long‑term investing, large-cap stocks tend to offer more stability, proven business models, and better access to capital. They’re generally less volatile than small/mid caps and more likely to survive downturns, which aligns with a long-term, lower-risk approach.

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

   • Purpose: Limit results to major, reputable U.S. exchanges.
   • Rationale: These exchanges have stricter listing requirements, better liquidity, tighter spreads, and more analyst coverage. That makes it easier to get reliable information and to enter/exit positions over time, which supports a long-term investment strategy.

3. Region: United States

   • Purpose: Restrict to U.S.-domiciled companies.
   • Rationale: You specifically asked about the U.S. stock market. This filter ensures the companies are primarily governed by U.S. regulations, accounting standards, and economic conditions, fitting your geographic preference.

4. Net Margin ≥ 10%

   • Purpose: Target companies with solid profitability.
   • Rationale: A net margin of at least 10% indicates the business keeps a meaningful portion of its revenue as profit. Sustainable margins can help companies weather downturns, reinvest in growth, and return cash to shareholders—key attributes for long-term compounding.

5. Return on Equity (ROE) ≥ 15%

   • Purpose: Screen for efficient, high-quality businesses.
   • Rationale: ROE measures how effectively a company uses shareholders’ capital. A minimum of 15% suggests strong capital allocation and competitive advantages. Over long periods, companies with consistently high ROE tend to compound shareholder value more effectively.

6. Revenue 5-Year CAGR ≥ 8%

   • Purpose: Ensure the companies are still growing, not just stable.
   • Rationale: Long-term investors benefit when businesses can grow their revenue at healthy rates. A 5-year compound annual growth rate (CAGR) of at least 8% indicates durable top-line growth, which supports future earnings growth and potential stock appreciation.

7. P/E (TTM) Between 10 and 30

   • Purpose: Focus on reasonably valued, not extremely cheap or extremely expensive, stocks.
   • Rationale: A P/E below 10 can sometimes flag distressed or structurally challenged businesses, while a P/E above 30 may indicate very high expectations and higher valuation risk. The 10–30 range aims for a balance: quality companies that aren’t extremely overvalued, supporting more sustainable long-term returns.

Why Results Match Your Long-Term Investment Goal

• The size and exchange filters (market cap, XNYS/XNAS/XASE, U.S. region) prioritize stability, liquidity, and regulatory quality—important for holding positions over many years.
• The profitability and efficiency filters (net margin, ROE) favor durable, high-quality businesses that can compound capital over time.
• The growth filter (revenue 5-year CAGR) ensures you’re not just getting mature but stagnant companies; you’re targeting businesses with ongoing expansion.
• The valuation filter (P/E 10–30) helps avoid extremes in pricing, aiming for a more balanced risk/reward profile suitable for long-term investors.