Long term stock picks

Screening Filters

1. Market Cap ≥ $5,000,000,000

   • Purpose: Focus on larger, more established U.S. companies.
   • Rationale: For long-term investing, bigger companies (large caps) tend to have:
     • More stable earnings and business models
     • Better access to capital and credit
     • Lower probability of going to zero vs. small, speculative names
       This aligns with a “long-term pick” mindset rather than short-term speculation.

2. Region: United States

   • Purpose: Limit results to U.S.-based companies.
   • Rationale: The user specifically asked for “US markets,” so we focus on U.S. companies, which:
     • Report under U.S. accounting standards
     • Are typically more familiar to U.S.-focused investors
     • Align with U.S. macroeconomic and regulatory environments.

3. Exchange: XNYS (NYSE), XNAS (NASDAQ), XASE (AMEX)

   • Purpose: Include only major U.S. exchanges.
   • Rationale: Long-term investors usually prefer:
     • Highly regulated exchanges with strong listing standards
     • Better liquidity and tighter bid-ask spreads
     • More reliable disclosure and analyst coverage
       This avoids OTC/pink-sheet names that can be riskier and less transparent.

4. Return on Equity (ROE) ≥ 12%

   • Purpose: Ensure the company generates solid profitability relative to shareholder equity.
   • Rationale: For long-term holdings, you generally want:
     • Businesses that consistently earn attractive returns on capital
     • Management teams that deploy equity efficiently
       A 12%+ ROE is a common threshold used to separate average from higher-quality businesses.

5. Debt-to-Equity (D/E) ≤ 1

   • Purpose: Limit leverage to avoid overly indebted companies.
   • Rationale: Over the long term, high debt can:
     • Increase bankruptcy or distress risk during downturns
     • Reduce flexibility for investment and growth
       By capping D/E at 1, we tilt toward financially sound firms with balanced capital structures.

6. EPS 5-Year CAGR ≥ 8%

   • Purpose: Require a history of earnings growth.
   • Rationale: Long-term stock performance is heavily driven by earnings growth. A 5-year EPS compound annual growth rate (CAGR) of 8%+ suggests:
     • The business has been expanding, not stagnating
     • There is some track record (not just a single good year)
       This supports the idea of “long-term picks” rather than one-off turnaround bets.

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

   • Purpose: Filter out extremely cheap (potentially distressed) and extremely expensive (possibly overhyped) stocks.
   • Rationale: For long-term investing:
     • P/E below ~10 can sometimes signal structural problems or very cyclical earnings
     • P/E above ~30 can imply very high expectations and valuation risk
       The 10–30 range seeks a middle ground: reasonably valued companies with growth, without venturing into extreme value traps or frothy valuations.

Why Results Match Long-Term U.S. Picks:

• The U.S. region and major-exchange filters ensure you’re looking at mainstream, well-regulated U.S. stocks.
• The market cap, ROE, and D/E filters push the list toward financially robust, higher-quality businesses that are more suitable to hold for years.
• The EPS growth filter targets companies with a demonstrated history of growing earnings, which is key for long-term compounding.
• The P/E range attempts to balance quality and growth with valuation discipline, avoiding both deep-distress and extreme overvaluation.

Together, these filters aim to surface established, fundamentally solid U.S. companies with reasonable valuations and a track record of growth—characteristics that are typically desirable for long-term stock picks.