Resources
Every metric the screener tests, defined in public.
These are the definitions the app itself uses in its tooltips. A screen is only as honest as its metrics, so each one says what it measures and where it misleads.
What you pay
The multiples. Each one asks the same question — how much am I paying for what I get — against a different denominator, and each is wrong in its own way.
- NCAV / Market Cap
- Net current asset value (current assets − total liabilities) divided by market cap. Graham's 2/3 rule means paying at most two thirds of NCAV, i.e. NCAV of about 1.5x market cap or more.
- Enterprise Value
- Market cap plus debt minus cash. Below zero means you are handed more net cash than the shares cost.
- P/E
- Price over trailing earnings. Required to be positive first, so loss-makers cannot slip through on a negative multiple.
- P/B
- Market cap over book equity. Excluded when equity is negative, since a negative P/B is not a cheap one.
- Price / Sales
- Market cap over trailing revenue. Keeps negative-EV names from being cash shells with no business attached.
- EV / EBITDA
- The acquirer's multiple: what the whole business costs relative to its operating earnings. Must be positive — a negative multiple means EBITDA is negative, not that the company is cheap.
- EV / EBIT
- Enterprise value over operating profit. Stricter than EV/EBITDA because depreciation is a real cost for anything with factories, fleets or stores — EBITDA flatters exactly the asset-heavy businesses deep value keeps finding.
- Fair-Value Upside
- Estimated fair value over spot, minus one. Fair value is trailing net income x the no-growth P/E (or book x the book multiple for loss-makers) — a valuation anchor, not a forecast.
- PEG
- Forward P/E divided by forward EPS growth. Under 1 the market is charging you less than a point of multiple per point of growth.
- EV/Sales per Growth Point
- EV/Sales divided by forward revenue growth in points. EV/S of 4 at 35% growth is 0.11; EV/S of 10 at 20% is 0.50. The first is far more interesting for a rerating thesis even though both are 'growth stocks'.
Whether it survives the wait
A discount only pays if the company is still there when it closes. These are the balance-sheet tests every screen applies before it calls something cheap.
- Current Ratio
- Current assets over current liabilities. The asset discount is only real if the company can pay next year's bills without a forced sale.
- Debt / Equity
- Total debt over shareholders' equity. Lenders rank ahead of you, so leverage can consume the discount before it closes. Companies with negative equity are excluded rather than scored as unlevered.
- Equity / Assets
- Share of the balance sheet funded by owners rather than creditors.
- Net Debt / EBITDA
- Debt less cash over EBITDA. Leverage ahead of you in the stack can destroy the thesis before it plays out. Net-cash companies score 0 rather than 'unknown'.
Whether the earnings are real
Accounting profit can be produced without cash. These separate a business that generates money from one that reports it.
- Profitable
- Positive trailing net income. A long call expires; an unprofitable turnaround may not arrive before it does.
- Operating Cash Flow
- Cash generated by the business before capex. Positive OCF with positive FCF is the check that reported earnings are real rather than accrual.
- Free Cash Flow
- Cash from operations less capital expenditure, trailing twelve months. Required to be positive: a cheap company burning cash gets cheaper.
- FCF Yield
- Free cash flow divided by market cap. The cash actually available to owners after capex, which is what an owner earns — unlike accounting earnings, which can be produced without any.
- Gross Margin
- Gross profit over revenue. High and rising margins are the clearest quantitative trace of pricing power.
- Gross-Margin Change
- Gross margin this year minus last year, in points. The screen asks for stable or improving: a falling gross margin is the classic value trap, where the multiple is low because the business is being competed away.
- Rule of 40
- Revenue growth plus FCF margin. Above 40% the company is choosing between growth and cash rather than failing at both.
Whether it is growing
Used by the growth LEAP screen, where the thesis is a re-rating driven by expansion rather than by reversion to book.
- Revenue Growth (TTM)
- Trailing revenue growth year over year. The business has to actually be expanding before leverage on it is worth paying for.
- Forward Revenue Growth
- Consensus revenue growth for the next fiscal year. A LEAP is a bet on the future, so the forward number matters more than the trailing one. A name with no consensus estimate fails rather than passing on the trailing figure.
- Forward EPS Growth
- Consensus EPS growth for the next fiscal year. Ahead of revenue growth it implies operating leverage — margins inflecting, which is what reprices a stock.
- Quality Gate
- ROIC above the floor and free cash flow positive — waived for companies growing revenue over 30%, where the letter allows an exception for a business whose margins are still inflecting. 1 = passes.
What management is doing
The share count, the dividend and the catalysts a screener can actually see in the filings.
- Dilution
- Change in share count year over year. Positive means new shares are transferring your claim to someone else; negative means buybacks. Based on annual filings, so it lags.
- Dividend Yield
- Trailing dividend over price, tested against the market yield. Being paid to wait is what makes a slow re-rating tolerable.
- Catalysts
- How many catalysts the numbers can see: buyback, earnings turnaround, debt paydown of 10%+, gross-margin recovery, revenue rising after a down year. Asset sales, spin-offs and takeovers are invisible to a screener and stay on the second-pass checklist. Without any catalyst it is a statistic, not an investment.
See them applied
Every scan reports each of these with the value it was tested against, pass or fail.
Browse the screens