Quality compounder

Bullish

High gross profitability + not expensive + clean accounting. The kind of business Buffett writes about.

PRIMARY SOURCE

Novy-Marx 2013

Piotroski 2000

TYPICAL HORIZON

6-12 months

FACTORS USED

qualityvalueaccruals

What it means

The business generates high gross margins (pricing power), trades at a reasonable multiple (not frothy), and its earnings quality is clean (real cash flow, not accrual accounting tricks). These businesses compound value over years, not quarters.

Why it works

Novy-Marx 2013 showed that gross profitability is the strongest quality predictor of future returns — stronger than ROE or net margin. Combined with Piotroski F-Score clean-accounting screen, the signal is durable across regimes.

Watch out

Quality companies can still be overvalued. If the market has already priced in the compounding, expected returns shrink to the cost of capital. Pattern fires most usefully when there's also an earnings catalyst or mean-reverting valuation compression.

Live matches

50 tickers firing right now

TickerCompanySectorChangeScore

NEMNewmont CorporationMaterials+0.72%71[25–95]CSCOCisco SystemsTechnology+0.57%69[23–95]APPAppLovin CorporationTechnology-1.72%68[22–95]VVisa Inc.Financials+2.12%68[22–95]RKT.LReckitt BenckiserConsumer Defensive+0.62%67[21–95]MAMastercard Inc.Financials+2.35%67[21–95]NUNu HoldingsFinancials+0.82%66[20–95]AUTO.LAuto Trader GroupTechnology+2.15%66[20–95]INVE-B.STInvestor ABFinancial Services+0.72%65[19–95]GSKGSK plcHealthcare+1.19%65[19–95]6098.TRecruit HoldingsIndustrials+7.94%65[19–95]NFLXNetflix Inc.Communication+3.02%65[19–95]NDSNNordson CorporationIndustrials+0.68%65[19–95]ICEIntercontinental ExchangeFinancials+1.06%65[19–95]ZMZoom Video CommunicationsTechnology-1.29%64[18–95]YUMYum! BrandsConsumer+1.56%64[18–95]EXPN.LExperian plcIndustrials+2.48%64[18–95]PBRPetrobras (ADR)Energy+3.86%64[18–95]BIIBBiogen Inc.Healthcare-0.54%63[17–95]ACGLArch Capital GroupFinancial Services+2.01%63[17–95]FRTFederal Realty TrustReal Estate+1.56%63[17–95]0027.HKGalaxy EntertainmentConsumer Cyclical-0.42%63[17–95]0883.HKCNOOC LimitedEnergy+2.99%63[17–95]METAMeta PlatformsTechnology-0.49%63[17–95]CMECME Group Inc.Financials+2.09%63[17–95]MSCIMSCI Inc.Financials+3.99%63[17–95]CTASCintas CorporationIndustrials+3.68%62[16–95]TRVTravelers CompaniesFinancial Services+2.08%62[16–95]GSK.LGSK plcHealthcare+0.16%62[16–95]EMREmerson ElectricIndustrials-0.62%62[16–95]SOL.AXWH Soul PattinsonFinancial Services+1.69%62[16–95]CCLCarnival CorporationConsumer Cyclical+1.71%61[15–95]MSFTMicrosoft CorporationTechnology+0.38%61[15–95]SU.TOSuncor EnergyEnergy+2.51%61[15–95]O39.SIOCBC BankFinancial Services+1.69%61[15–95]005930.KSSamsung ElectronicsTechnology-1.96%61[15–95]SPGIS&P Global Inc.Financials+3.54%61[15–95]ESEversource EnergyUtilities+2.56%61[15–95]TDGTransDigm GroupIndustrials+2.91%61[15–95]AZNAstraZeneca PLCHealthcare+1.29%61[15–95]FTNTFortinet Inc.Technology+3.03%61[15–95]PGProcter & GambleConsumer+0.58%60[14–95]FASTFastenal CompanyIndustrials+1.71%60[14–95]HESAYHermès InternationalConsumer+1.18%60[14–95]NDAQNasdaq Inc.Financial Services+1.69%60[14–95]GGGGraco Inc.Industrials+0.59%60[14–95]RR.LRolls-Royce HoldingsIndustrials+1.66%60[14–95]MCDMcDonald's CorporationConsumer+2.20%60[14–95]AVGOBroadcom Inc.Semiconductors-1.05%60[14–95]PDDPDD Holdings (Pinduoduo)Technology-0.90%60[14–95]

Disclaimer. Pattern matches are research signals, not investment advice. Past performance of an academic effect does not guarantee future returns. Forward-return tracking for Framler's own implementation begins 2026-05-16 after the calibration window closes.