Combining Five-Year ROE and Price Action in a Stock Screen

Summary

This post outlines an equity screen that combines a stated price-range condition, five consecutive years of return on equity above 15%, and a three-session limit-up pattern on the prior day. It presents the technical conditions as a way to find stocks with recent price strength and the ROE requirement as a filter for sustained profitability. The post also sketches indicator and code examples, although some formula details are placeholders or inconsistent with the described screening conditions.

The author cautions that a few indicators cannot capture a company’s full condition, short-term price action can reflect sentiment, and a recent run of limit-up sessions says little on its own about long-term performance. Suggested refinements include adding trend indicators and valuation or dividend measures, examining industry and company specifics, and using stop-loss or profit-taking controls. No backtest results or performance evidence are provided, so the proposed screen should be treated as an idea requiring independent validation.

Key ideas

• The proposed screen combines a price-range filter, sustained ROE above 15%, and a recent three-session limit-up condition.
• The post frames profitability, price action, and market sentiment as complementary selection inputs.
• It recommends adding fundamental and technical checks and considering company and industry context.
• The post provides no backtest evidence, and its sample formulas do not fully align with the written logic.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.