Screening Filters
is_index_component: ['GSPC'] (S&P 500)
- Purpose: Limit the universe to companies that are members of the S&P 500 index.
- Rationale:
- Your question is specifically about generating profits from investments in the S&P 500 (INX).
- By restricting results to S&P 500 constituents, the screen ensures all stocks are directly relevant to that index.
- Any strategies or insights built on the result set can be directly integrated into an S&P 500-based approach (e.g., stock-picking within the index, tilting a core S&P 500 holding toward certain types of companies, etc.).
year_price_change_pct: min 10
- Purpose: Select stocks within the S&P 500 that have appreciated at least 10% over the past year.
- Rationale:
- A positive and meaningful 1-year performance filter highlights stocks with recent price momentum and/or improving fundamentals.
- For profit-generation strategies, focusing on winners (rather than laggards) aligns with momentum-based or “trend-following” approaches often used within broad indices.
- It ensures you’re looking at companies that are already contributing positively to S&P 500 returns, potentially offering an edge if you overweight or selectively invest in them.
return_on_equity: min 15
- Purpose: Capture companies with strong profitability relative to shareholder equity.
- Rationale:
- ROE ≥ 15% is generally considered a sign of a high-quality, efficiently run business.
- High-ROE companies tend to compound capital more effectively over time, which is directly relevant for generating long-term profits.
- Within the S&P 500, this filter helps isolate quality leaders rather than average or low-profitability firms, aligning with a “quality factor” tilt that historically has produced better risk-adjusted returns.
eps_5yr_cagr: min 10
- Purpose: Focus on companies with at least 10% compound annual growth in earnings per share over the last 5 years.
- Rationale:
- Sustained EPS growth is a key driver of long-term stock price appreciation.
- A 5-year lookback emphasizes durable, not just short-term, growth—useful for building a profit-generating strategy that isn’t purely speculative.
- Within the S&P 500, this highlights companies with proven growth trajectories that can support future price gains and, in many cases, dividend growth as well.
pe_ttm: min 10, max 25
- Purpose: Filter out extremely low-valuation (possibly distressed or cyclical trough) and extremely high-valuation (possibly speculative) stocks, focusing on a “reasonable” valuation band.
- Rationale:
- P/E below ~10 can indicate special situations or significant perceived risk; P/E above ~25 may imply very high growth expectations and elevated downside risk if expectations are missed.
- By bounding P/E, the screen aims to identify profitable, growing S&P 500 companies that are neither “deep value” with potential structural issues, nor “hyper-growth” priced for perfection.
- This supports a balanced strategy: quality growth at a reasonable price (a common approach to generating profits while trying to manage valuation risk).
Why Results Match Your Goal (Profiting from the S&P 500)
Direct linkage to the index:
- The
is_index_component = GSPC filter ensures every result is part of the S&P 500, so any stock-level strategy (overweighting, factor tilts, satellite holdings) is directly compatible with an S&P 500–based core investment.
Quality and growth tilt within the index:
- High
return_on_equity and strong eps_5yr_cagr isolate businesses that are both profitable and growing earnings, which are fundamental drivers of long-run shareholder returns.
- Tilting your S&P 500 exposure toward these kinds of companies is a common way to aim for returns above the broad index.
Reasonable valuation discipline:
- The
pe_ttm band (10–25) combines a growth/quality focus with valuation sanity checks—helping avoid the riskiest extremes where profits are more speculative or risk of multiple compression is high.
Momentum / recent performance confirmation:
- The
year_price_change_pct ≥ 10 filter adds a momentum component by favoring stocks already trending positively, which many investors use to improve the probability of near- to medium-term gains within an index.
Taken together, these filters transform the broad S&P 500 into a more targeted subset of index members: profitable, growing, reasonably valued companies with positive recent performance. This subset can underpin strategies such as:
- Overweighting these names relative to a plain S&P 500 ETF.
- Building a “satellite” portfolio of screened stocks around a core S&P 500 holding.
- Using the filter as a starting point for deeper fundamental work aimed at generating above-index profits.
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.