Do you want to find companies with a growing or at least stable gross margin? Now you can as we have added a Gross Margin Score to the Quant Investing screener.
Gross Margin Score, 1 = Good, 100 = bad
The Gross Margin score is a number between 1 and 100 (1 is good 100 is bad) that is calculated based on the Gross Margin (Marx) growth and stability over the past 8 years.
Gross Margin (Marx) = gross profits (sales minus cost of goods sold) / total assets (depreciation deducted).
Gross Margin Novy-Marx the only quality ratio that works
Of all the quality ratios we have tested the Gross Margin (Marx) ratio, developed by Professor Novy-Marx (University of Rochester), was the only one we found that could consistently increase your returns.
You can read more about the Novy-Marx Gross Margin ratio here: Have you been using the wrong quality ratio?
More growth and stable gross margin = lower Gross Margin score
The more stable the Gross Margin (Marx) and the higher its growth has been over the past 8 years the lower the Gross Margin Score will be.
Where to find it
In the screener the Gross Margin Score can only be selected and filtered as a column.
It can be found under Quality ratios and indicators.
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