Screener | TFA

How the list is made

Rules decide who is on it, points decide the order

The eight rules every company must passA company that fails one is not on the list.

Price to sales under 2You pay less than $2 for each $1 of yearly sales.
Market value under $3 billionSmaller companies get less attention, so mispricings last longer. Under $2 billion earns extra points.
Long-term debt under half of equityTop marks go to companies with more cash than debt, and the best case is no debt at all. A company whose debt can't be read reliably from its filings can't pass this check. If the debt that could be read is already over the limit, it fails. Otherwise, if it passes all the other checks, a note under the results names it.
Net profit margin of 3% or moreAt least 3 cents of profit on every sales dollar, not counting one-time items. That lets in thin-margin businesses such as retailers and distributors, while higher margins still earn more points. One-time gains, such as selling a business, are taken out, one-time charges, such as a write-down or a loss on paying off debt early, are added back, and an unusual tax bill is replaced by a normal one. Gains, charges and tax credits that come most years count as part of the business.
Based and incorporated in the USRules out foreign listings (ADRs) and companies registered offshore, such as in the Cayman Islands.
Positive equity and free cash flowIt owns more than it owes, and it brings in more cash than it spends.
Profitable in 2 of the last 3 yearsOne good year can be luck. Two out of three is a pattern. One-time items don't count here either.
Sales not shrinking more than 5%Keeps out value traps: stocks that look cheap because the business is dying.

Figures come from each company's latest fiscal year and latest balance sheet filed with the SEC. Prices are from the last close. Banks, insurers and the other companies Nasdaq files under Finance are not screened; see the banks and insurers under book value.

How the 100-point score worksThe score orders companies that already passed. Each part earns points up to its maximum.

Cheap vs. sales15Full points at a price to sales of 0, falling evenly to none at the limit of 2.
Debt2020 for no debt at all, 14 for more cash than debt, and up to 8 for low debt, falling to none at the limit.
Profit margin15Full points at a margin of 30% or more, without one-time items.
Cash generation10Full points when a year's free cash flow is 15% or more of the market value.
Sales growth10Full points for sales up 20% or more on the year before.
Under $2 billion5For the smallest companies on the list.
Out of favor5Full points at 50% or more below the 52-week high.
Few analysts55 when no analyst covers it, 3 for one or two.
Under book value10Full points when the market value is under book value, falling evenly to none at twice book value.
Insiders buying5For Tier 1 or 2 insider buying.

A high score means a company clears the rules by a wide margin. It is not a forecast and doesn't mean the stock will do well.

Flags, for contextWorth knowing. None of them keeps a company off the list.

Out of favorThe price is 25% or more below its 52-week high.
Industry out of favorIts whole industry has slumped: the typical (median) company in it trades 25% or more below its 52-week high. The industries are listed under the results.
UndiscoveredTwo or fewer Wall Street analysts publish estimates on it.
Under book valueThe whole company is worth less on the market than its book value: shareholders' equity less preferred stock, what shareholders would keep if everything were sold at the value on its balance sheet and every debt paid.
Insiders buyingIn the last 30 days, its executives, directors or big owners bought its stock on the open market with their own money: $1 million or more, or a single buyer growing their stake by 20% or more (Tier 1 or 2 on the insider buying page).
Below insiders' priceInsiders are buying, and today's price is under the average price they paid. You can buy for less than they did.
Above upper band, wait for a pullbackThe price has risen unusually fast: it is above the average of its last 20 weekly closing prices plus two standard deviations of them (the upper Bollinger band). Many traders take that as a sign to wait for the price to pull back rather than buy after the run-up.

Out of favor and Under book value also earn score points on a sliding scale, so a company can earn some of those points without the flag, and an Out of favor flag doesn't always mean full points. Insiders buying earns its points exactly when its flag shows, and Few analysts gives points to exactly the companies flagged Undiscovered.

Data sources and updatesWhere each figure comes from, and when it is refreshed

Financial statementsEach company's own filings with the SEC, read from the SEC's XBRL data: its latest fiscal year and its latest balance sheet.
Listings, sectors, industries and market valuesNasdaq's public stock screener.
Prices, the 52-week range, stock splits and analyst countsYahoo Finance's public data.
Insider purchases and new 5%+ stakesForm 4 and Schedule 13D filings, from the SEC's daily index of filings.
Updated every weekday eveningAfter the SEC stops taking filings for the day, at 10pm New York time. The date in the header is the trading day the prices are from.

Industries out of favor

An industry is out of favor when its typical (median) company trades 25% or more below its 52-week high: the whole industry has slumped, not just one company in it. Beside each is the median price to sales of its companies against the whole market's, so you can see whether the slump left the industry cheap. Only industries with at least 5 companies that have a year of weekly prices are measured, each company counted once. A company listed for less than a year is left out, since its 52-week high is just its high since listing.

Under 1x cash

Companies worth less on the market than their net cash: the cash and short-term investments in their accounts, minus all their debt and any preferred stock or outside stakes in their subsidiaries. Other bills, such as payables and leases, are not subtracted, so check those in the filings too. There is usually a reason a stock trades this low: most of these companies spend more than they bring in, so each shows its cash runway, how many years its cash would last at the latest year's spending. This list is separate from the ranked list above and doesn't change its scores.

What a company needs to be listed

Market value under its net cashNet cash is cash and short-term investments minus all debt, preferred stock and outside stakes in its subsidiaries, from the latest balance sheet filed with the SEC. Long-term investments don't count: they can take years to turn into cash.
All of its debt could be read, and it owns more than it owesNet cash needs all of the company's debt, so a company whose debt can't be read reliably from its filings is left out, and so is one whose shareholders' equity is zero or less.
Based and incorporated in the USThe same test as the ranked list, confirmed with the SEC.
Not in Nasdaq's Finance sectorMost companies filed there are banks, insurers and lenders, whose cash is mostly their customers' money. The real estate and data firms filed with them are left out too, and so are lenders Nasdaq files in other sectors (mortgage REITs and business development companies).
Profit is not requiredCash runway is cash and short-term investments divided by the latest fiscal year's cash burn (negative free cash flow). A company that brought in more cash than it spent isn't burning cash, so it has no runway to show, and none is shown when its latest fiscal year ended more than 15 months before its balance sheet.

Banks and insurers under book value

Banks, insurers and other financial companies are kept out of the ranked list, because their cash and debt are mostly their customers' money. Investors judge them by a different yardstick: the price against book value, what shareholders would keep if everything were sold at the value on the balance sheet and every debt paid. These are the profitable ones priced under that value.

What a company needs to be listed

Banks: under tangible book valueBook value less preferred stock, goodwill and other intangible assets (mostly premiums paid for past acquisitions), the way bank analysts measure it. Profit and return on equity are the common shareholders'.
Insurers and others: under book valueShareholders' equity less preferred stock.
Profitable last yearA profit left to common shareholders (after preferred dividends) and a positive return on equity, not counting one-time items, in a fiscal year that is current. A stock under book value while losing money may be cheap for a reason.
A US company, not a REIT, fund or land developerBased and incorporated in the US, confirmed with the SEC. Real estate investment trusts, business development companies (funds that lend to private companies) and the land developers Nasdaq also files under Finance are left out.

Overpriced giants

The kind of stock to avoid, the opposite of what the screener looks for: companies worth more than $90 billion priced at more than 10 times their sales over the last 12 months (or their latest fiscal year, where quarterly figures aren't available). At that price, the stock only pays off if the company keeps growing fast for many years. Companies whose sales figure looks incomplete, lenders, and REITs (whose sales are rent, which every REIT is priced at many times) are left out.