How the list is made

Every night at 02:30 UTC

Every night, our systems read the annual and quarterly reports of every operating company listed in the United States with a market value above $150 million. They come straight from SEC EDGAR, the government's public filing system — not a paid data vendor, and not an analyst's estimate.

Last night that was 3,171 companies.

The quality test

Five checks, all mechanical, all run on the numbers a company already filed.

• How much profit it makes on the money invested in the business — return on capital (ROIC) — because turning $1 into more than $1 of profit, year after year, is hard to copy.
• Operating margin, the share of every sales dollar left over after running the business, because thin margins leave no room for a bad year.
• Revenue growth — whether more customers are paying it more over time.
• How many of the last ten years it generated more cash than it spent, because a business that only looks profitable on paper is one we don't trust.
• Debt — how much it owes, and whether that load could sink it in a bad year.

The price test

A cheap company can still be a bad one. These three checks ask a narrower question: for the quality on offer, is the price fair?

• Cash yield (free cash flow yield) — how much spare cash the business throws off each year for every dollar you'd pay to own it today, like an interest rate on your money.
• Price to profit (EV/EBIT) — what you'd pay for the whole company, debt included, against how much operating profit it makes. Lower means you pay less for each dollar of profit.
• Earnings yield — profit divided by price, the familiar price-to-earnings ratio turned upside down so a higher number is the better one.

The accounting checks

A company can look cheap and high-quality and still be lying. Three checks look for the warning signs before you ever read the filing yourself.

• The Beneish test (an accounting-manipulation score) looks for the fingerprints of a company inflating its numbers.
• The Piotroski score, a nine-point checklist, shows whether the business is getting healthier or weaker.
• Accruals, the gap between profit on paper and cash in the bank, flag an early warning when that gap widens.

We hide companies that fail the Beneish test unless you ask to see them.

What the list is not

• It is not investment advice.
• It is not a prediction that any of these stocks will go up.
• Passing our tests is not a buy signal. It means a company cleared two mechanical checks on quality and price — nothing more. You still have to read the business and decide whether you'd want to own it for years.

The deep dive

Every ticker also has a deep dive: a long-form analysis of the business, its management, its risks, and what it might be worth, written by our research process rather than a screener. Each deep dive costs one credit — a free account gets one to try, and every paid plan includes more each month.