Which stock is a good long term pick

Screening Filters

1. Revenue 5-Year CAGR (Compound Annual Growth Rate) ≥ 10%:

   • Purpose: To identify companies with consistent and strong revenue growth over the past five years.
   • Rationale: Revenue growth is a key indicator of a company's ability to expand its business and capture market share. A minimum of 10% CAGR ensures that only companies with robust and sustained growth are considered, which is essential for long-term investment.

2. EPS (Earnings Per Share) 5-Year CAGR ≥ 10%:

   • Purpose: To focus on companies with consistent earnings growth over the past five years.
   • Rationale: EPS growth reflects a company's profitability and efficiency in generating shareholder value. A minimum of 10% CAGR ensures that the selected companies are not only growing their revenues but also translating that growth into profits, which is critical for long-term investors.

3. Debt-to-Equity Ratio ≤ 0.5:

   • Purpose: To filter for companies with low financial leverage and manageable debt levels.
   • Rationale: A low debt-to-equity ratio indicates that a company is not overly reliant on debt to finance its operations, reducing financial risk. This is particularly important for long-term investments, as high debt levels can become a burden during economic downturns.

4. Return on Equity (ROE) ≥ 15%:

   • Purpose: To identify companies that generate strong returns on shareholders' equity.
   • Rationale: ROE is a measure of how effectively a company uses its equity to generate profits. A minimum of 15% ensures that the selected companies are efficiently utilizing their resources to create value for shareholders, which is a key characteristic of high-quality, long-term investments.

5. Current Ratio ≥ 1.5:

   • Purpose: To ensure that companies have sufficient short-term liquidity to cover their current liabilities.
   • Rationale: A current ratio above 1.5 indicates that a company has a healthy level of working capital, reducing the risk of liquidity issues. This is important for long-term investors, as companies with strong liquidity are better positioned to weather economic challenges and invest in growth opportunities.

Why Results Match:

• The selected filters collectively focus on identifying financially strong, growth-oriented companies with low financial risk and high profitability. These characteristics align well with the user's query for a good long-term stock pick.
• By emphasizing revenue and earnings growth, the filters ensure that the selected companies have a proven track record of expansion and profitability, which are critical for sustained long-term performance.
• The inclusion of financial health metrics like the debt-to-equity ratio and current ratio ensures that the selected companies are not only growing but are also financially stable, reducing the risk of potential financial distress.
• The ROE filter ensures that the companies are efficiently generating returns for shareholders, a key factor for long-term wealth creation.

In summary, the filters are designed to identify high-quality companies with strong growth potential, financial stability, and efficient operations, making them suitable candidates for long-term investment.