Pick a stock to purchase

Screening Filters

1. US Region + Major US Exchanges (XNYS, XNAS, XASE)

• Purpose: Restrict the search to U.S.-listed stocks.
• Rationale: The user asked to “pick a US stock,” so these filters ensure the results are domestic equities traded on major U.S. exchanges, improving liquidity and investability.

2. Large and Mid Market Cap

• Purpose: Focus on established companies.
• Rationale: Large- and mid-cap stocks are generally more stable, more liquid, and easier to analyze than small caps, which makes them more suitable when someone wants a reasonable stock to buy.

3. Beta: LowRisk or ModerateRisk

• Purpose: Screen for stocks with lower volatility.
• Rationale: Since the user is simply asking for a stock to purchase, not a speculative trade, this helps avoid overly volatile names and leans toward more defensive, steadier candidates.

4. Price Above 200-Day Moving Average

• Purpose: Identify stocks in a long-term uptrend.
• Rationale: Trading above the 200-day moving average is commonly used as a sign of sustained positive momentum and healthier price trend, which can improve the quality of the selection.

5. Net Margin > 0

• Purpose: Require profitability.
• Rationale: A positive net margin means the company is actually earning money after expenses, which is a strong baseline for a stock someone might want to own.

6. Return on Equity > 0

• Purpose: Require positive shareholder returns.
• Rationale: Positive ROE suggests the company is generating value from shareholder capital, which helps filter for businesses with at least some level of capital efficiency.

7. Current Ratio > 1.2

• Purpose: Screen for acceptable short-term liquidity.
• Rationale: This helps ensure the company can cover its near-term obligations, reducing the risk of financial stress.

8. Debt-to-Equity < 1

• Purpose: Limit balance-sheet leverage.
• Rationale: Lower leverage generally means less financial risk. A debt-to-equity ratio below 1 helps favor companies with healthier capital structures.

9. Quarter Revenue YoY Growth > 0

• Purpose: Require top-line growth.
• Rationale: Positive year-over-year revenue growth indicates the business is still expanding, which is a good sign for a stock purchase.

10. Quarter EPS YoY Growth > 0

• Purpose: Require earnings growth.
• Rationale: Positive EPS growth suggests improving profitability and stronger underlying performance, not just revenue expansion.

11. P/E TTM < 30

• Purpose: Avoid extreme valuations.
• Rationale: This helps filter out stocks that may already be priced for perfection, keeping the results closer to reasonable valuation levels.

12. P/S Ratio < 10

• Purpose: Add a secondary valuation check.
• Rationale: For companies where earnings can be noisy, sales-based valuation still provides a useful ceiling and helps avoid overly expensive names.

Why Results Match:

• The filters collectively target U.S. stocks that are investable, established, financially healthy, and not overly speculative.
• They favor companies with positive growth, profitability, manageable debt, and reasonable valuation, which is consistent with someone looking to buy a stock rather than trade a high-risk momentum name.
• The trend filter (price above 200-day moving average) adds a market-confirmation layer, while the risk filters and fundamental filters help avoid weak balance sheets and unprofitable businesses.
• Overall, this screening approach is well-suited for identifying higher-quality U.S. stocks that may be more appropriate for purchase.