What stock to buy

Screening Filters

1. Market Cap ≥ $10B (market_cap: {'min': '10000000000'})

   • Purpose: Focus on larger, more established companies.
   • Rationale:
     • When someone asks “What stock should I buy?”, they often benefit more from stable, well-known businesses rather than highly speculative small caps.
     • Large-cap companies typically have more diversified operations, better access to capital, and more analyst coverage, which can reduce some company-specific risk compared with tiny, thinly traded names.

2. Price Above 200-Day Moving Average (moving_average_relationship: ['PriceAboveMA200'])

   • Purpose: Select stocks in a confirmed longer-term uptrend.
   • Rationale:
     • The 200-day moving average is a common technical indicator used to separate longer-term uptrends from downtrends.
     • Requiring price > 200-day MA filters out many stocks that are currently weak or in sustained declines.
     • For someone asking what to buy now, this increases the odds you’re looking at stocks with positive momentum rather than “falling knives.”

3. Component of S&P 500 Index (is_index_component: ['GSPC'])

   • Purpose: Limit results to major U.S. blue-chip companies.
   • Rationale:
     • The S&P 500 contains large, established companies that pass minimum size, liquidity, and profitability screens set by index committees.
     • This aligns with a general, beginner-style question like “What stock should I buy?” by steering toward widely followed, higher-quality names rather than niche or risky listings.
     • It also ensures better liquidity and narrower bid-ask spreads, which is practical for most investors.

4. Quarterly EPS YoY Growth ≥ 5% (quarter_eps_yoy_growth: {'min': '5'})

   • Purpose: Ensure companies are growing earnings, not stagnating or shrinking.
   • Rationale:
     • Positive earnings growth is a basic sign of improving business performance.
     • A minimum 5% year-over-year EPS growth in the latest quarter filters out companies with deteriorating or flat profits.
     • For a “what to buy” query, this steers you away from companies whose fundamentals are currently weakening, even if they’re large and well-known.

5. P/E (TTM) Between 10 and 35 (pe_ttm: {'min': '10', 'max': '35'})

   • Purpose: Avoid stocks that are extremely cheap (often for a reason) or extremely expensive (high expectations, higher downside if they disappoint).
   • Rationale:
     • A P/E below ~10 can indicate deep value or potential problems (declining business, cyclical peak, or one-off earnings distortions).
     • A P/E above ~35 often implies very high growth expectations already priced in, which can be risky if growth slows even slightly.
     • By setting 10–35, the filter aims for “reasonable” valuations where you’re not obviously overpaying, but also not scraping the bottom of the barrel.

Why Results Match the User’s Question (“What stock should I buy?”)

• The filters collectively target large, well-known, financially sound companies (S&P 500, large-cap) that are growing earnings and trading in a positive long-term trend, at non-extreme valuations.
• This is a sensible starting universe for someone asking broadly what they should buy, because it:
  • Reduces exposure to the riskiest, most speculative stocks (micro-caps, distressed companies).
  • Focuses on businesses that are currently performing well (EPS growth) and are being rewarded by the market (price above 200-day MA).
  • Tries to balance quality and growth with valuation discipline (P/E range).

The screen doesn’t “pick” a single best stock for you—but it narrows the list to candidates that are more likely to be suitable for many investors as potential core or satellite holdings, subject to your own risk tolerance, time horizon, and diversification needs.