Stock screens

Companies holding more cash than debt, or carrying investment-grade credit on the way there. A fortress balance sheet does not make a business good, but it is what lets a good business survive a bad year without asking anyone for money.

Names throwing off 5 to 30 percent of their market value in free cash each year, with revenue that has not gone backwards. The cap at 30 percent is deliberate: above it the yield is usually a peak-cyclical number that will not repeat.

Investment-grade balance sheets, revenue growing at least 8 percent a year, and reported earnings that actually arrive as cash. The cash-conversion test is the one most growth screens leave out, and it is the one that separates a compounder from an accrual.

Steady revenue growth without the price swings that usually come with it. Low volatility is not safety on its own, so weak credit is excluded here rather than left for the reader to notice.

Investment-grade, still growing, and not yet priced for perfection. The valuation test is a reverse discounted cash flow: what growth does today's price already assume, and is the company delivering it.

The opposite list, and the more useful one to keep. These are sound companies whose price already assumes at least 20 percent annual free cash flow growth. Nothing here is a short idea; it is a list of names with no room left for disappointment.

Buybacks that at least cover the stock handed to employees. A repurchase programme that runs smaller than stock-based compensation is not returning capital, it is mopping up dilution, and the two are reported far enough apart that almost nobody checks.

Companies spending the largest share of their revenue on research and development. High intensity is a claim about the future, not evidence about it, which is why the balance sheet sits in the table beside it.