Quality Growth Stock Screener

Worked Example — Verifies Today's #1 Score

We re-compute today's top-ranked stock factor by factor. The composite must reconcile to the displayed score within ±0.5. If it doesn't, the model is broken — please report it.

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Red Flag Rules

Red flags annotate tickers; they do not remove them from the basket. Quality Growth uses flags that are structural (hard) or relative to today's basket (soft), because high P/E is normal for quality growers — a fixed P/E > 40 threshold would mis-fire on NVDA-class names.

Hard flags (structural)

• FCF Margin < 0 — company burns cash; incompatible with "quality grower" thesis.
• D/E > 3 — extreme leverage; balance sheet risk outweighs growth signal.

Soft flags (relative to today's basket)

• P/E above basket 75th percentile — relatively expensive even among quality growers.
• RSI(14) > 75 — technically overbought; short-term mean-reversion risk.
• EPS growth < 0 — bottom line shrinking while top line grows; dilutive or margin-pressured.

6-Factor Quality Growth Model

This screener evaluates US large-cap stocks (market cap > $5B) using a composite scoring system that balances cash-flow quality with growth momentum. Each stock receives a score from 0 to 100 based on six fundamental factors. The model prioritizes cash-flow quality (45% combined weight) over pure growth (30%), reflecting the empirical finding that quality factors tend to outperform over full market cycles.

The screener produces a daily basket of the top 40 names. The basket composition shifts day-to-day as scores re-rank — the Movers tab tracks who joins, leaves, gains, and slips.

Config Schema

• Universe — US large-cap, top 250 by market cap
• Factors — 6 (see Factor Weights below)
• Weights — FCF 25 · RevG 20 · ROIC 20 · P/E 15 · EPS 10 · D/E 10 (sum = 100)
• Direction — FCF ↑ · RevG ↑ · ROIC ↑ · P/E ↓ · EPS ↑ · D/E ↓; composite always ↑ = better
• Pass threshold — score ≥ 50 (soft filter; shown but flagged if below)
• Basket size — 40 (top-by-score after pass filter)
• Top N Focus — 5 (deterministic top-by-score; no editorial curation)
• Score bands — 80+ Elite · 70–79 Strong · 60–69 Average · <60 Weak

Selection Chain

The pipeline is deterministic — no human curation between the feed and the page:

        universe (250 by mcap) → factor pull & filter (require FCF, RevG, ROIC) → score (0–100) → rank by score desc

        → Full Rankings = all scored names

        → Ranked list = top 40 (basket size)

        → Top 5 Focus = top 5 of ranked list

Factor Weights

FCF Margin

25%

Revenue Growth

20%

ROIC

20%

Valuation (P/E)

15%

EPS Growth

10%

Balance Sheet (D/E)

10%

Scoring Formula

Each factor is normalized to a 0-to-max-weight scale. For "more is better" factors (FCF, Revenue Growth, ROIC, EPS Growth), values are linearly scaled against an empirical range. For "less is better" factors (P/E, D/E), values are inversely scored. All factor scores are capped at their maximum weight to prevent any single factor from dominating.

        FCF Score = min(25, fcfMargin / 40% × 25)

        RevG Score = min(20, revGrowth / 50% × 20)

        ROIC Score = min(20, roic / 30% × 20)

        P/E Score = max(0, (1 − (pe − 5) / 35)) × 15

        EPS Score = min(10, (epsG + 20%) / 120% × 10)

        D/E Score = max(0, (1 − de / 3)) × 10

        Composite = FCF + RevG + ROIC + P/E + EPS + D/E

Factor Descriptions

FCF Margin (25%)

Free Cash Flow as a percentage of revenue. Measures how efficiently a company converts revenue into cash. Higher margins indicate pricing power and operational efficiency. Range: 0–40%+ (capped).

Revenue Growth (20%)

Year-over-year revenue growth rate. Captures top-line momentum and market share expansion. Range: 0–50%+ (capped).

ROIC (20%)

Return on Invested Capital. Measures management's ability to allocate capital and generate returns above cost of capital. A hallmark of durable competitive advantage. Range: 0–30%+ (capped).

Valuation — P/E Ratio (15%)

Price-to-Earnings ratio scored inversely. Penalizes extreme overvaluation while allowing premium multiples for quality growers. Sweet spot: 10–25x. Scores zero above 40x.

EPS Growth (10%)

Earnings per share growth rate. Confirms revenue growth translates to bottom-line expansion. Distinguishes profitable growth from revenue-buying. Range: -20%–100% (capped).

Balance Sheet — D/E (10%)

Debt-to-Equity ratio scored inversely. Favors companies with conservative leverage. Lower debt provides resilience during downturns. Scores zero above 3.0x.

What This Screen Does Not Capture

Forward guidance, management commentary, and qualitative business-model shifts
Institutional and insider positioning changes (covered by separate Alva SDKs)
Macro regime sensitivity — the screen does not adjust for rate cycles or recession probability
Sector-specific risk factors such as regulatory changes, patent cliffs, or commodity price shocks
Market timing — the screen identifies quality, not optimal entry points
Earnings surprises and estimate revisions between quarterly reports

Quality Growth Stock ScreenerRefreshes 09:00 & 14:00 BJT