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

26 tickers firing right now

TickerCompanySectorChangeScore

ABBVAbbVie Inc.Healthcare-1.10%72[56–88]BKNGBooking HoldingsConsumer+2.32%71[55–87]NVDANVIDIA CorporationTechnology+4.58%71[56–86]VVisa Inc.Financials+0.08%69[54–84]ZMZoom Video CommunicationsTechnology+2.93%69[54–84]NFLXNetflix Inc.Communication-0.21%69[54–84]NUNu HoldingsFinancials+0.31%69[53–85]GSKGSK plcHealthcare-2.15%68[55–81]METAMeta Platforms, Inc.Communication Services+2.75%67[52–82]PLTRPalantir Technologies Inc.Technology+0.98%66[51–81]OTISOtis WorldwideIndustrials-1.72%66[51–81]INTUIntuit Inc.Technology+3.01%66[52–80]AVGOBroadcom Inc.Technology+0.66%66[51–81]TXNTexas InstrumentsSemiconductors-1.80%65[51–79]LRCXLam Research CorporationTechnology+4.33%65[51–79]CTASCintas CorporationIndustrials-0.83%65[52–78]ROKRockwell AutomationIndustrials-1.80%65[50–80]CMECME Group Inc.Financials+0.31%65[49–81]GOOGLAlphabet Inc.Communication Services+1.59%65[50–80]PLDPrologis Inc.Real Estate+0.24%65[52–78]EMREmerson ElectricIndustrials-0.64%64[49–79]PFEPfizer Inc.Healthcare+1.22%64[51–77]MCDMcDonald's CorporationConsumer-0.61%64[50–78]SHELShell plcEnergy-0.24%64[52–76]MARMarriott InternationalConsumer-0.81%64[49–79]BSXBoston ScientificHealthcare-4.60%64[48–80]

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