STOCK PICKS

Screening Filters

1. Market Cap ≥ $10,000,000,000 (Large Caps)

   • Purpose: Focus on larger, more established companies.
   • Rationale: When someone simply asks for “stock picks,” a sensible default is to avoid very small or speculative names. Large caps tend to:
     • Have more stable business models and cash flows
     • Be better covered by analysts and media (more information available)
     • Typically exhibit lower bankruptcy and extreme volatility risk than tiny companies

2. Beta: “ModerateRisk”

   • Purpose: Target stocks with moderate volatility relative to the overall market.
   • Rationale: Instead of ultra-volatile or extremely defensive stocks, “moderate risk” beta aims for a middle ground:
     • Enough movement to offer meaningful upside
     • Not so volatile that price swings are extreme or hard to tolerate
     • Fits a typical investor’s risk tolerance when they haven’t specified otherwise

3. Exchange: XNYS, XNAS, XASE (Major U.S. Exchanges)

   • Purpose: Limit results to stocks listed on major U.S. exchanges (NYSE, NASDAQ, NYSE American).
   • Rationale: These exchanges generally:
     • Enforce stricter listing and reporting standards
     • Provide better liquidity and tighter spreads
     • Offer more reliable data and transparency than many OTC or foreign markets
       This aligns with a broad “stock picks” request where U.S.-listed names are a common starting point.

4. Net Margin ≥ 8.0001%

   • Purpose: Ensure the companies are meaningfully profitable.
   • Rationale: A net margin above 8% helps:
     • Filter out companies that are barely breaking even or losing money
     • Favor businesses with some pricing power and operating efficiency
     • Increase the likelihood that profits can support reinvestment, dividends, or buybacks

5. 5‑Year Revenue CAGR ≥ 5.0001%

   • Purpose: Focus on companies with consistent top-line growth.
   • Rationale: A minimum 5-year revenue growth rate over 5%:
     • Screens for businesses that are expanding rather than stagnating or shrinking
     • Suggests a tailwind from growing demand, market share gains, or new products
     • Helps avoid purely “value traps” that look cheap but are actually in structural decline

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

   • Purpose: Target reasonably valued companies, neither extremely cheap nor excessively expensive.
   • Rationale:
     • Lower bound (10): Avoids many distressed or one-time-earnings situations where a very low P/E can be a red flag (e.g., earnings peak, cyclical downturn coming).
     • Upper bound (30): Excludes the most richly priced, highly speculative growth names where expectations may be fragile.
     • Overall, this range is a common “core” valuation band for quality, profitable companies.

Why Results Match “Stock Picks”

• The screen narrows the universe to large, established, U.S.-listed companies with:

  • Solid profitability (net margins > 8%)
  • Demonstrated growth over five years (revenue CAGR > 5%)
  • Moderate risk profiles (beta in a middle range)
  • Reasonable valuations (P/E 10–30)

• For a broad, non-specific request like “STOCK PICKS,” these filters are a practical way to surface higher-quality, balanced candidates—not penny stocks or extreme speculation, but companies that combine size, growth, profitability, and reasonable pricing, which is often what investors are implicitly looking for when they don’t specify a niche or strategy.