The Microcap Minute Classroom. Module 9, chapter 6: Try it: a quality-at-a-fair-price screen over the S&P 500 <div class="learn" markdown="1"> **What you will learn** - What the S&P 500 is, and why it makes a good practice ground - How to combine value, quality, and growth filters into one screen - How to read a result without jumping to conclusions - What a fundamentals-only screen cannot tell you - The full loop: screen, shortlist, verify, then study </div> Time to build one complete screen, start to finish, using everything from this module. Our practice ground is the S&P 500: a list of about five hundred of the largest US companies, chosen by Standard & Poor's. Membership is itself a rough size and stability filter, so the list holds fewer strange tiny companies and more names you already know. ## The recipe We ask for four things, one from each idea in Chapter 2: - Universe: members of the S&P 500. - Value: P/E below 25, so we pay less than ₹25 for each ₹1 of yearly profit. - Quality: return on equity above 15%, so the business earns more than ₹15 a year on every ₹100 of the owners' money. - Growth: revenue higher than it was three years ago. An honest note before we run it: these thresholds are teaching examples, not magic numbers. A careful grown-up might choose 20 or 30 instead of 25. The skill is knowing what each line removes, not memorising the numbers. ## Running it Notice the universe selector and the filter boxes: that is the whole recipe, typed in. On the [StockAnalysis screener](https://stockanalysis.com/stocks/screener/?ref=MICROCAPMINUTE), set the universe to the S&P 500 and enter the three conditions. The results appear instantly. Some days ten names pass, some days sixty: prices move every day, so the list moves every day. ## Reading one result Suppose a familiar name shows up, say Coca-Cola, which often passes quality-at-a-fair-price screens. Open [its overview page](https://stockanalysis.com/stocks/ko/?ref=MICROCAPMINUTE). Notice the P/E, the profit margin, and the dividend yield, which is the cash paid to shareholders each year shown as a slice of the share price. One share costs about $70 (roughly ₹6,300) as we write this, but you need to buy nothing to practise: every step here is free. And then the golden rule from Chapter 5 applies: before Coca-Cola, or any other survivor, earns real study time, it goes to EDGAR for verification against its own filings. Read this next sentence twice, because it is the whole module in one line: we are not saying Coca-Cola is worth buying. A screen produces a reading pile, nothing more. Two people can run this exact recipe, read the same filings, and reach opposite conclusions, and both can be right for their own situations. The screen never decides. It only shortlists. ## What this recipe cannot tell you This screen answers exactly one question: which big US companies look like decent businesses at not-silly prices on paper? It cannot answer the other one: is money moving toward these names now? For that you need the rotation map from [Module 6](/mm-classroom/m06/). The Microcap Minute runs its own search the other way round: its screen finds where money is moving first, then checks each survivor's business numbers. And there is a quiet hole inside the recipe itself. A hard rule like "return on equity above 15%" throws out most banks, because regulation makes banks hold far more of the owners' money against their loans than a software firm does, so their ROE reads lower by design. Know what each line of your screen removes, including the lines that quietly remove whole industries. <div class="try" markdown="1"> **Try it yourself** Run the recipe yourself on the [screener](https://stockanalysis.com/stocks/screener/?ref=MICROCAPMINUTE): S&P 500 universe, P/E under 25, return on equity above 15%, revenue up over three years. Write down how many names pass. Pick one you recognise, run it through the five-question checklist from Chapter 3, then find its newest 10-K on EDGAR. That is the entire module in one sitting. </div> <div class="takeaways" markdown="1"> **Key takeaways** - The S&P 500 is a clean practice universe of big, familiar companies. - A good screen mixes value, quality, and growth, and you should know why each line exists. - Results change daily; a fair price is a judgement, not a fact. - Every screen answers one question; know which one yours answers, and what it silently removes. - Screen, shortlist, verify on EDGAR, then study. Never skip the third step. </div>. I am Ritu, a synthetic voice, and the words I am reading are Ayush Agrawal's.

# Try it: a quality-at-a-fair-price screen over the S&P 500 <div class="learn" markdown="1"> **What you will learn** - What the S&P 500 is, and why it makes a good practice ground - How to combine value, quality, and growth filters into one screen - How to read a result without jumping to conclusions - What a fundamentals-only screen cannot tell you - The full loop: screen, shortlist, verify, then study </div> Time to build one complete screen, start to finish, using everything from this module. Our practice ground is the S&P 500: a list of about five hundred of the largest US companies, chosen by Standard & Poor's. Membership is itself a rough size and stability filter, so the list holds fewer strange tiny companies and more names you already know. ## The recipe We ask for four things, one from each idea in Chapter 2: - Universe: members of the S&P 500. - Value: P/E below 25, so we pay less than ₹25 for each ₹1 of yearly profit. - Quality: return on equity above 15%, so the business earns more than ₹15 a year on every ₹100 of the owners' money. - Growth: revenue higher than it was three years ago. An honest note before we run it: these thresholds are teaching examples, not magic numbers. A careful grown-up might choose 20 or 30 instead of 25. The skill is knowing what each line removes, not memorising the numbers. ## Running it Notice the universe selector and the filter boxes: that is the whole recipe, typed in. On the [StockAnalysis screener](https://stockanalysis.com/stocks/screener/?ref=MICROCAPMINUTE), set the universe to the S&P 500 and enter the three conditions. The results appear instantly. Some days ten names pass, some days sixty: prices move every day, so the list moves every day. ## Reading one result Suppose a familiar name shows up, say Coca-Cola, which often passes quality-at-a-fair-price screens. Open [its overview page](https://stockanalysis.com/stocks/ko/?ref=MICROCAPMINUTE). Notice the P/E, the profit margin, and the dividend yield, which is the cash paid to shareholders each year shown as a slice of the share price. One share costs about $70 (roughly ₹6,300) as we write this, but you need to buy nothing to practise: every step here is free. And then the golden rule from Chapter 5 applies: before Coca-Cola, or any other survivor, earns real study time, it goes to EDGAR for verification against its own filings. Read this next sentence twice, because it is the whole module in one line: we are not saying Coca-Cola is worth buying. A screen produces a reading pile, nothing more. Two people can run this exact recipe, read the same filings, and reach opposite conclusions, and both can be right for their own situations. The screen never decides. It only shortlists. ## What this recipe cannot tell you This screen answers exactly one question: which big US companies look like decent businesses at not-silly prices on paper? It cannot answer the other one: is money moving toward these names now? For that you need the rotation map from [Module 6](/mm-classroom/m06/). The Microcap Minute runs its own search the other way round: its screen finds where money is moving first, then checks each survivor's business numbers. And there is a quiet hole inside the recipe itself. A hard rule like "return on equity above 15%" throws out most banks, because regulation makes banks hold far more of the owners' money against their loans than a software firm does, so their ROE reads lower by design. Know what each line of your screen removes, including the lines that quietly remove whole industries. <div class="try" markdown="1"> **Try it yourself** Run the recipe yourself on the [screener](https://stockanalysis.com/stocks/screener/?ref=MICROCAPMINUTE): S&P 500 universe, P/E under 25, return on equity above 15%, revenue up over three years. Write down how many names pass. Pick one you recognise, run it through the five-question checklist from Chapter 3, then find its newest 10-K on EDGAR. That is the entire module in one sitting. </div> <div class="takeaways" markdown="1"> **Key takeaways** - The S&P 500 is a clean practice universe of big, familiar companies. - A good screen mixes value, quality, and growth, and you should know why each line exists. - Results change daily; a fair price is a judgement, not a fact. - Every screen answers one question; know which one yours answers, and what it silently removes. - Screen, shortlist, verify on EDGAR, then study. Never skip the third step. </div>

That was chapter 6 of module 9. The text, the pictures and the exercise are on the lesson page. Thank you for listening.