Undervalued stocks

Screening Filters & Rationale

1. Market Capitalization (500M - 50B):

   • Purpose: Focus on mid-cap and small-cap stocks with growth potential while avoiding micro-cap risks.
   • Rationale: These companies often have room for growth and are less volatile than micro-cap stocks.

2. Debt-to-Equity Ratio (≤ 0.5):

   • Purpose: Identify companies with low financial leverage.
   • Rationale: Low debt levels reduce financial risk and indicate strong balance sheets.

3. Price-to-Earnings Ratio (≤ 20):

   • Purpose: Target undervalued stocks based on earnings.
   • Rationale: A low P/E ratio suggests the stock may be undervalued relative to its earnings.

4. Price-to-Book Ratio (≤ 2):

   • Purpose: Focus on stocks trading near or below their book value.
   • Rationale: A low P/B ratio indicates potential undervaluation and financial stability.

5. Return on Equity (≥ 10%):

   • Purpose: Select companies with strong profitability and efficient use of equity.
   • Rationale: High ROE reflects a company's ability to generate returns for shareholders.