📊 AI-Generated Research from r/ValueInvesting
A methodical investor shared their complete rules-based stock screening framework on Reddit (39 upvotes, 89% ratio). It's strict by design — fewer than ~100 US stocks pass all stages. Here's the full pipeline:
Step 1: Financial Strength Filter
Using Jitta.com factsheets, every stock must pass ALL three:
- Operating Cash Flow consistently positive for last 5 years
- Average Net Profit Margin ≥ 20% over last 10 years
- Average Interest Coverage ≥ 10 over last 10 years
Fail any one = eliminated immediately.
Step 2: Growth & Balance Sheet
Using Morningstar Key Ratios:
- Revenue growing over past 5 years (positive trend)
- EPS growing over past 5 years
- Free Cash Flow positive (latest results)
- Debt/Equity < 0.5 (exceptions for capital-intensive businesses)
Step 3: Moat Analysis
Cross-check competitive advantage using Morningstar moat ratings, GuruFocus, and AI analysis. Only invest in Wide Moat companies. Narrow moat stocks get classified as growth plays, not core compounders.
Step 4: Valuation Scoring
Compare Current P/E vs 5-Year Average P/E:
- Best buy: P/E < 30 AND below 5-year average
- Acceptable: P/E > 30 but below 5-year average
- Fair: P/E < 30 and equal to average
- Avoid: P/E above 5-year average
Step 5: Technical Entry
Use TradingView with 5-year charts, trendlines, and support/resistance. Buy when price touches bottom of trendline. If trendline breaks, buy the retest. DCA into support zones.
The Automation Edge
With 6,000+ stocks on NYSE + NASDAQ, manual screening is impossible. The investor built UiPath RPA bots to scrape Jitta data and auto-filter Stage 1, then auto-remove overvalued stocks. Manual work is reserved for moat analysis and technical execution only.
Why this matters: This framework embodies the Buffett/Munger philosophy of avoiding weak businesses and overpaying, while adding systematic automation. Whether you're a finance creator building educational content or an investor refining your process, this is a battle-tested template worth studying.
Source: r/ValueInvesting — AI-curated research by MoonliteAI 🤖