Kids long term investment

Screening Filters

1. Market Cap ≥ $10B (market_cap: {'min': '10000000000'})

   • Purpose: Focus on larger, more established companies.
   • Rationale: For long-term investing for kids, stability and survivability over many years are crucial. Large-cap companies:
     • Tend to have more diversified businesses and stronger competitive positions.
     • Are less volatile on average than small caps.
     • Are more likely to withstand recessions and industry shocks, which matters for a 10–20+ year horizon.

2. Listed on Major U.S. Exchanges (list_exchange: ['XNYS', 'XNAS', 'XASE'])
   (New York Stock Exchange, NASDAQ, NYSE American)

   • Purpose: Restrict to well-regulated, liquid markets with strong disclosure requirements.
   • Rationale: Long-term holdings for kids benefit from:
     • Higher transparency and stricter reporting standards.
     • Better liquidity (easier to buy/sell at fair prices).
     • Lower risk of governance issues than in lightly regulated markets.

3. Return on Equity ≥ 12% (return_on_equity: {'min': '12'})

   • Purpose: Ensure we’re looking at businesses that generate solid returns on shareholder capital.
   • Rationale: Over long periods, high-quality companies that consistently earn good returns on equity tend to compound value more effectively. A 12%+ ROE suggests:
     • Good profitability.
     • Some combination of strong competitive advantages, good pricing power, or efficient operations.
     • A higher chance of meaningful long-term wealth compounding, which aligns with investing for a child’s future.

4. Debt-to-Equity ≤ 1 (debt_equity: {'max': '1'})

   • Purpose: Avoid highly leveraged companies.
   • Rationale: Excessive debt can be dangerous over long horizons:
     • High leverage increases bankruptcy and distress risk during downturns.
     • Companies with moderate or low leverage (D/E ≤ 1) generally have more financial flexibility to invest, survive recessions, and keep growing.
     • For kids’ investments, you want businesses that can endure multiple economic cycles with less risk of permanent capital loss.

5. Revenue 5-Year CAGR ≥ 7% (revenue_5yr_cagr: {'min': '7'})

   • Purpose: Target companies with a solid track record of growing their sales.
   • Rationale: Long-term returns are driven by underlying business growth:
     • A 5-year compound annual growth rate (CAGR) of at least 7% in revenue indicates the business is expanding, not stagnating.
     • This growth can come from gaining market share, entering new markets, or launching new products—all supportive of long-term compounding.
     • For a child’s portfolio, sustained top-line growth helps support future earnings and potentially dividends.

6. EPS 5-Year CAGR ≥ 7% (eps_5yr_cagr: {'min': '7'})

   • Purpose: Make sure earnings per share are growing at a healthy pace, not just revenue.
   • Rationale: Revenue growth without profit growth can be low quality. Requiring EPS growth:
     • Confirms that profits are rising, not just sales.
     • Suggests improving margins, scale benefits, or effective capital allocation (e.g., buybacks, productivity gains).
     • Over the long term, stock prices tend to follow EPS growth, so consistent 7%+ EPS CAGR is attractive for multi-decade holdings.

Why These Results Match “Good Long-Term Investment Options for Kids”

• Stability + Quality: Large-cap, profitable companies with good ROE and controlled debt are more likely to be durable businesses that can be held for many years.
• Growth for Compounding: Requiring 7%+ growth in both revenue and EPS screens for companies that are not only stable but also compounding their business results over time—key for building wealth over a child’s lifetime.
• Risk Management: Limiting leverage and staying on major U.S. exchanges reduces certain avoidable risks (excessive debt, poor governance, illiquidity), which is especially important when the investment horizon is long and meant to be relatively low-touch.
• Alignment with Long Horizons: The combination of quality, growth, and financial strength is tailored to find companies that can reasonably be expected to still be around, and ideally larger, when the child is an adult.

These filters don’t guarantee success, but they are designed to tilt the search toward strong, established, growing companies that are more suitable as long-term “buy and hold” candidates for kids’ portfolios.