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

ABBVAbbVie Inc.Healthcare+1.11%81[28–95]GOOGLAlphabet Inc.Technology+1.56%78[25–95]INVE-B.STInvestor ABFinancial Services+1.24%77[11–95]GLPIGaming & Leisure PropertiesReal Estate+0.24%76[10–95]GSGoldman SachsFinancial Services+0.66%76[23–95]NDAQNasdaq Inc.Financial Services-1.46%75[9–95]NOVO-B.CONovo NordiskHealthcare-0.50%75[9–95]CTASCintas CorporationIndustrials-1.32%74[8–95]TSMTaiwan SemiconductorSemiconductors+2.96%74[8–95]EWBCEast West BancorpFinancial Services+0.95%74[8–95]SQMSociedad Quimica Minera (ADR)Basic Materials+0.62%73[7–95]KOCoca-Cola CompanyConsumer-0.52%72[6–95]000660.KSSK HynixSemiconductors+0.44%71[5–95]CSCOCisco SystemsTechnology+3.56%71[5–95]4519.TChugai PharmaceuticalHealthcare-2.32%71[5–95]FASTFastenal CompanyIndustrials+1.05%70[5–95]SYKStryker CorporationHealthcare+0.90%70[5–95]AUTO.LAuto Trader GroupTechnology+0.28%69[5–95]6098.TRecruit HoldingsIndustrials-0.42%69[5–95]6861.TKeyence CorporationTechnology-1.15%69[5–95]NAB.AXNational Australia BankFinancial Services+1.61%69[5–95]MIN.AXMineral ResourcesBasic Materials+2.16%69[5–95]6857.TAdvantest CorporationSemiconductors+2.71%68[5–95]ABI.BRAB InBev (Brussels)Consumer Defensive+0.50%68[5–95]FTNTFortinet Inc.Technology+1.25%68[15–95]WPMWheaton Precious MetalsBasic Materials+2.14%68[5–95]VEEVVeeva SystemsTechnology-3.05%67[5–95]ALLAllstate CorpFinancial Services-0.30%67[5–95]DDDuPont de NemoursBasic Materials+0.60%66[5–95]VVisa Inc.Financial Services+0.23%66[13–95]6146.TDISCO CorporationSemiconductors-0.25%66[5–95]ABNBAirbnb Inc.Technology+1.22%66[13–95]CINFCincinnati FinancialFinancial Services-0.12%66[5–95]SU.TOSuncor EnergyEnergy+0.87%65[5–95]BHP.AXBHP GroupBasic Materials+1.58%65[5–95]6273.TSMC CorporationIndustrials+0.04%65[5–95]VRTVertiv HoldingsIndustrials+2.46%65[5–95]INGA.ASING GroepFinancial Services+1.44%65[5–95]CBOECboe Global MarketsFinancial Services-2.14%64[5–95]O39.SIOCBC BankFinancial Services+0.35%64[5–95]2318.HKPing An InsuranceFinancial Services-1.42%64[5–95]VRSKVerisk AnalyticsIndustrials-2.67%64[5–95]SFStifel FinancialFinancial Services-0.09%63[5–95]NWG.LNatWest GroupFinancial Services+1.75%63[5–95]0883.HKCNOOC LimitedEnergy-1.84%63[5–95]ABEVAmbev S.A. (ADR)Consumer Defensive+3.10%63[5–95]EVREvercore Inc.Financial Services+1.03%63[5–95]1928.HKSands China Ltd.Consumer Cyclical-3.97%63[5–95]HWMHowmet AerospaceIndustrials+1.27%62[5–95]EXPN.LExperian plcIndustrials+1.24%62[5–95]

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.