Profitable small caps under $1B market cap

Screening Filters

1. market_cap: max = 1,000,000,000

   • Purpose: Limit results to companies with a market capitalization under $1 billion.
   • Rationale: The user explicitly asked for stocks “with a market capitalization under $1 billion.” This cap directly enforces that upper bound so large- and most mid-cap companies are excluded.

2. market_cap_category: ['small', 'micro', 'nano']

   • Purpose: Focus on the lower end of the market-cap spectrum: small-cap and below.
   • Rationale:
     • “Small-cap” is what the user requested.
     • Including micro and nano caps still respects the “under $1 billion” requirement and broadens the universe to slightly smaller companies that may also fit the user’s interest in smaller stocks.
     • In practice, classification bands vary by provider, so using explicit categories helps make sure we keep to genuinely smaller companies, not just borderline mid-caps under $1B.

3. net_margin: min = 0

   • Purpose: Ensure the company is at least not losing money on a net basis.
   • Rationale:
     • Net margin ≥ 0 means net income is zero or positive relative to revenue.
     • This is a straightforward way to approximate “profitable” at the company-wide level: we filter out firms with negative net income (loss-making).

4. return_on_equity (ROE): min = 0

   • Purpose: Ensure shareholders’ equity is generating non-negative returns.
   • Rationale:
     • ROE ≥ 0 means the company is not destroying shareholder value through persistent losses relative to equity.
     • Combining ROE ≥ 0 with net margin ≥ 0 strengthens the profitability screen: we avoid firms that are technically breaking even but still showing negative returns to equity holders.

Why Results Match:

• The market_cap max = $1B filter directly satisfies the “under $1 billion” requirement.
• The market_cap_category = small/micro/nano filter targets the part of the market the user cares about—small caps and even smaller—while ensuring we stay in the lower-cap space.
• The net_margin ≥ 0 and ROE ≥ 0 filters operationalize the user’s request for “profitable” by selecting companies that are not only not losing money but also not generating negative returns on equity.

All requested aspects—small size and profitability—are addressed with these filters. The only nuance is that “profitable” is implemented as non-negative, not “highly profitable”; if desired, we could tighten these thresholds (e.g., net_margin ≥ 5%, ROE ≥ 10%) to focus on stronger profitability.