Screening Filters
Market Capitalization: 300M – 3B USD (market_cap)
- Purpose: Target small-cap companies.
- Rationale:
- In US equity classification, small caps commonly fall in the roughly $300M–$3B range.
- This band avoids very tiny micro-caps (often riskier, illiquid) while still focusing on smaller, higher-growth potential companies vs. mid/large caps.
Minimum Liquidity: Monthly Average Dollar Volume ≥ 500,000 USD (monthly_average_dollar_volume)
- Purpose: Ensure the stocks are reasonably tradable in the US market.
- Rationale:
- A minimum of $500k traded per month filters out extremely illiquid names where entering/exiting positions can be hard or costly due to wide bid-ask spreads.
- This supports your goal of being able to “trade” these stocks rather than just hold illiquid positions.
US Major Exchanges Only: NYSE, NASDAQ, NYSE American (list_exchange: XNYS, XNAS, XASE)
- Purpose: Restrict to stocks listed on major US exchanges.
- Rationale:
- Ensures you’re looking at US-listed companies, aligning with “trade in the US market.”
- Excludes OTC and pink sheet securities, which often have lower reporting standards and liquidity.
Positive Earnings: EPS (TTM) ≥ 0 (eps_ttm)
- Purpose: Focus on companies that are at least breaking even or profitable.
- Rationale:
- “Good” small caps are often those that have moved beyond persistent losses.
- Requiring non-negative earnings eliminates many speculative or early-stage companies that may not yet have a clear path to profitability.
Healthy Profitability: Net Margin ≥ 8% (net_margin)
- Purpose: Filter for businesses with solid profit margins.
- Rationale:
- A minimum 8% net margin suggests the company can convert revenue into actual profit, not just sales volume.
- This helps distinguish stronger operators from low-quality, thin-margin businesses.
Efficient Use of Equity: ROE ≥ 10% (return_on_equity)
- Purpose: Identify companies generating attractive returns on shareholders’ capital.
- Rationale:
- ROE of at least 10% is a common benchmark for “quality” — the business is relatively efficient at turning equity into profits.
- This aligns with the idea of “good” small caps, not just any small company.
Growth Filter (Short Term): Quarterly Revenue YoY Growth ≥ 10% (quarter_revenue_yoy_growth)
- Purpose: Require recent revenue growth.
- Rationale:
- A minimum 10% year-over-year revenue increase in the latest quarter points to companies that are currently expanding their business.
- This avoids stagnating or shrinking businesses and tilts the list toward growth-oriented small caps.
Growth Filter (Longer Term): Annual Revenue YoY Growth ≥ 10% (annual_revenue_yoy_growth)
- Purpose: Ensure that growth is not just a one-quarter anomaly.
- Rationale:
- Requires the company to have grown revenue at least 10% over the past year as a whole.
- Supports a more consistent growth profile, which improves the quality of candidates.
Reasonable Valuation: P/E (TTM) between 8 and 30 (pe_ttm)
- Purpose: Exclude extremely cheap (possibly distressed) and extremely expensive (possibly overhyped) stocks.
- Rationale:
- P/E < 8 can sometimes indicate underlying problems or cyclical issues; this filter reduces exposure to potential value traps.
- P/E > 30 can indicate very high expectations or speculative pricing; capping at 30 focuses on names with more grounded valuations for their earnings level.
Why Results Match Your Request
- Small-cap focus: The market cap range directly targets the small-cap segment.
- US tradability: Exchange selection plus a liquidity filter ensures you’re getting US-listed stocks that are actually practical to trade.
- “Good” quality: Positive earnings, healthy margins, solid ROE, and double-digit revenue growth (quarterly and annual) all tilt the results toward fundamentally stronger small-cap companies.
- Balanced risk/reward: The P/E range avoids the most distressed and most speculative valuations, helping surface candidates that are both growing and reasonably priced.
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.