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-1.19%72[56–88]NVDANVIDIA CorporationTechnology+4.44%71[56–86]BKNGBooking HoldingsConsumer+2.80%71[55–87]NUNu HoldingsFinancials+0.07%69[53–85]ZMZoom Video CommunicationsTechnology+2.48%69[54–84]NFLXNetflix Inc.Communication-0.92%69[54–84]VVisa Inc.Financials-0.35%69[54–84]GSKGSK plcHealthcare-1.67%68[55–81]METAMeta Platforms, Inc.Communication Services+2.40%67[52–82]PLTRPalantir Technologies Inc.Technology-1.27%66[51–81]OTISOtis WorldwideIndustrials-1.46%66[51–81]AVGOBroadcom Inc.Technology-0.25%66[51–81]INTUIntuit Inc.Technology+0.68%66[52–80]ROKRockwell AutomationIndustrials-1.28%65[50–80]CTASCintas CorporationIndustrials-0.50%65[52–78]LRCXLam Research CorporationTechnology+4.99%65[51–79]PLDPrologis Inc.Real Estate+1.07%65[52–78]CMECME Group Inc.Financials-0.80%65[49–81]TXNTexas InstrumentsSemiconductors-2.44%65[51–79]GOOGLAlphabet Inc.Communication Services+1.35%65[50–80]PFEPfizer Inc.Healthcare+0.77%64[51–77]BSXBoston ScientificHealthcare-4.60%64[48–80]MCDMcDonald's CorporationConsumer-0.73%64[50–78]SHELShell plcEnergy-0.29%64[52–76]MARMarriott InternationalConsumer-0.11%64[49–79]EMREmerson ElectricIndustrials-0.22%64[49–79]

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.