A high Piotroski F-Score of 9 means the company has financials like Fort Knox, and it is getting stronger. Historically, these stocks when paired with low Price/Book ratio have performed 7.5% better than the market annually, on average.
This is pretty much a cheat code to a high performing portfolio.
So what does the score of 9 mean?
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The score is the sum of 0/1 scores given to a company on 9 different criteria. If the company passes all 9 criteria than they get a score of 9. These criteria include 4 profitability metrics, 3 metrics on leverage, liquidity and source of funds, and the remaining 2 on operational efficiency.
Essentially the questions asked are:
- Is the company financially strong and whether this is an improving trend?
- Are earnings of good quality? Do they come from real business operations, and not accounting artifacts?
- Is the debt going down?
- Is the company diluting shareholders with new share issues?
- Is the gross margin improving, implying improving economies?
- Is the company getting better at turning over assets?
If the company passes all these filters, you can be sure that it is a financially and operationally strong company that is getting better and will in all likelihood continue to perform well. Once you pair this with low P/B or low P/E filters, you are able to select for stocks that are selling at attractive prices, and will therefore give you greater profits. High Piotroski F-score allows you to side-step potential value traps.
Here are the 20 large cap stocks that qualified in the month of March, 2025.
Of this list, I own TSM in my Dividend Fortress Portfolio.
Other stocks that look attractive at the first glance are SSNC and UTHR looking at the valuations.
Please note that this list is not a recommendation to buy or sell. You will have to do additional research on these stocks to see if they are at a good valuation, and they have to fit your personal investment scenarios. Do your own research and if necessary consult with an advisor.
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Shailesh Kumar, MBA is the founder of Astute Investor’s Calculus, where he shares high-conviction small-cap value ideas, stock reports, and investing strategies.
His work has been featured in the New York Times and profiled on Wikipedia. He previously ran Value Stock Guide, one of the earliest value investing platforms online.
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