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 a clean-accruals screen in the Piotroski 2000 spirit, 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

NUNu HoldingsFinancial Services-2.74%81[31–95]MOAltria GroupConsumer+1.38%79[29–95]GOOGLAlphabet Inc.Technology-1.17%76[26–95]INVE-B.STInvestor ABFinancial Services-0.04%75[25–95]NXPINXP SemiconductorsSemiconductors-1.35%75[25–95]6146.TDISCO CorporationSemiconductors+0.94%75[25–95]ADIAnalog DevicesSemiconductors-0.81%74[24–95]HLTHilton WorldwideConsumer-1.53%74[24–95]VRTXVertex PharmaceuticalsHealthcare-2.14%74[24–95]000660.KSSK HynixSemiconductors+12.73%74[24–95]ICEIntercontinental ExchangeFinancial Services+0.87%73[23–95]ABX.TOBarrick GoldBasic Materials+2.37%72[22–95]FASTFastenal CompanyIndustrials-1.52%71[21–95]0388.HKHong Kong ExchangesFinancial Services+0.77%70[20–95]AEMAgnico Eagle MinesBasic Materials+2.08%70[20–95]6098.TRecruit HoldingsIndustrials+2.57%70[20–95]GLPIGaming & Leisure PropertiesReal Estate+1.89%69[19–95]HIGThe Hartford Insurance Group, Inc.Financial Services-0.30%69[19–95]SU.TOSuncor EnergyEnergy+0.56%69[19–95]JNJJohnson & JohnsonHealthcare-2.21%69[19–95]6857.TAdvantest CorporationSemiconductors+0.97%68[18–95]ABI.BRAB InBev (Brussels)Consumer Defensive+0.06%68[18–95]035720.KSKakao Corp.Technology+3.48%68[18–95]DB1.DEDeutsche Börse AGFinancial Services+0.61%68[18–95]6861.TKeyence CorporationTechnology+1.31%68[18–95]SOL.AXWH Soul PattinsonFinancial Services-1.84%67[17–95]4503.TAstellas PharmaHealthcare+3.47%67[17–95]NAB.AXNational Australia BankFinancial Services-1.26%67[17–95]EQNR.OLEquinor ASAEnergy+1.49%67[17–95]CNR.TOCanadian National RailwayIndustrials+0.26%67[17–95]WPMWheaton Precious MetalsBasic Materials+2.05%66[16–95]0883.HKCNOOC LimitedEnergy+0.82%66[16–95]SQMSociedad Quimica Minera (ADR)Basic Materials+4.07%66[16–95]SCHWCharles SchwabFinancial Services-0.98%66[16–95]ABBVAbbVie Inc.Healthcare-1.56%66[16–95]SHEL.LShell plcEnergy+0.57%65[15–95]EXPN.LExperian plcIndustrials+1.44%65[15–95]CSXCSX CorporationIndustrials+0.57%65[15–95]DSY.PADassault SystèmesTechnology-0.04%64[14–95]VVisa Inc.Financial Services+0.05%64[14–95]FNVFranco-NevadaBasic Materials+2.82%64[14–95]NDSNNordson CorporationIndustrials+8.00%63[13–95]BP.LBP plcEnergy+2.39%63[13–95]FMG.AXFortescue MetalsBasic Materials-0.61%63[13–95]SAP.DESAP SETechnology-0.14%63[13–95]MPCMarathon PetroleumEnergy-0.70%63[13–95]SAND.STSandvik ABIndustrials+2.85%63[13–95]VRSKVerisk AnalyticsIndustrials+0.66%63[13–95]4661.TOriental Land Co.Consumer Cyclical+2.67%62[12–95]FTNTFortinet Inc.Technology-1.35%62[12–95]

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.