Screening Stocks by Price Strength and Five-Year ROE

Summary

The document describes a stock screen combining three conditions: daily price amplitude above 1, the average price above its five-day moving average, and return on equity above 15% for five consecutive years. It presents this as a blend of a short-term technical filter and a measure of sustained profitability. It also suggests comparing ROE within industries and considering earnings, market capitalization, and other technical factors when refining the selection.

Key ideas

• The screen combines price amplitude, position relative to a five-day moving average, and a multi-year ROE threshold.
• The author frames sustained ROE as a way to focus on business quality.
• Industry-specific analysis and within-industry ROE rankings are suggested as refinements.
• The document warns that past performance may not predict future returns and that accounting choices can distort ROE.
• The accompanying sample code uses different data fields and approximations, so it does not fully implement every stated screen condition.

Tags

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