This list shows US stocks that combine strong business quality, solid cash generation, and reasonable valuation filters in a Terry Smith-style approach. Stocks are sorted by market capitalization, highlighting larger and often more stable value candidates first.
| Symbol | Company | Sector | Price | Market Cap | FPE | ROA | 3M % | FA Rating | Analysts |
|---|---|---|---|---|---|---|---|---|---|
| QCOM | QUALCOMM INC | Information Technology | 136.2 | 143.48B | 12.05 | 10.12% | -14.57% | 7 / 10 | 69.57 |
| INTU | INTUIT INC | Information Technology | 393.25 | 107.06B | 14.57 | 12.66% | -27.88% | 7 / 10 | 81.95 |
| ADBE | ADOBE INC | Information Technology | 244.45 | 100.30B | 9.08 | 24.27% | -17.45% | 7 / 10 | 72.44 |
| REGN | REGENERON PHARMACEUTICALS | Health Care | 750.57 | 78.87B | 16.01 | 11.11% | 2.39% | 7 / 10 | 81.58 |
| NTES | NETEASE INC-ADR | Communication Services | 118.2 | 76.30B | 12.58 | 15.25% | -14.33% | 8 / 10 | 84.00 |
| FTNT | FORTINET INC | Information Technology | 81.84 | 60.97B | 26.94 | 17.84% | 8.57% | 7 / 10 | 67.06 |
| ADSK | AUTODESK INC | Information Technology | 242.02 | 51.31B | 19.07 | 9.02% | -8.91% | 7 / 10 | 83.59 |
| RMD | RESMED INC | Health Care | 228.12 | 32.74B | 18.58 | 17.47% | -11.44% | 8 / 10 | 73.60 |
| UTHR | UNITED THERAPEUTICS CORP | Health Care | 588.38 | 25.44B | 20.13 | 16.94% | 26.55% | 7 / 10 | 81.90 |
| NTAP | NETAPP INC | Information Technology | 104.53 | 20.46B | 12.01 | 12.16% | 0.66% | 7 / 10 | 70.71 |
Note: This table shows a subset of the stocks matching the screen criteria. The full list of stocks can be viewed in the Stock Screener tool.
Quality at a fair price investing focuses on buying strong businesses without overpaying. Companies with high margins, strong returns on capital, and dependable cash flow generation are often more durable over time. When those businesses are available at reasonable valuations, they can offer an attractive balance between quality and long-term return potential.
Investors looking for quality at a fair price stocks often search for businesses with strong pricing power, efficient operations, and reliable cash generation. Important signs include high gross and operating margins, healthy returns on capital, good cash conversion, manageable debt, and a valuation that is not excessive relative to free cash flow.
These are the rules used to build this stock list.
We start with US-listed stocks and apply a quality at a fair price screen inspired by Terry Smith-style investing. First, we use the standard liquidity filters to exclude very small and illiquid stocks. We then focus on companies with high gross and operating margins, strong cash conversion, consistent returns on capital, manageable debt relative to free cash flow, strong interest coverage, positive free cash flow growth, and a reasonable price-to-free-cash-flow ratio.
Average Volume above 50K
We require a minimum average daily volume of 50,000 shares to ensure sufficient liquidity for investors.
Market Cap above $300M
We exclude very small companies to avoid illiquid and highly speculative stocks.
Gross Margin above 55%
A high gross margin helps identify companies with strong pricing power and durable business quality.
Cash Conversion above 90%
We require that at least 90% of EBITDA is converted into cash flow to focus on companies with strong cash generation.
5-Year Average ROCE above 15%
A high return on capital employed helps identify businesses that can generate attractive returns from the capital they use.
Debt to Free Cash Flow below 5
We limit debt relative to free cash flow to focus on companies with manageable leverage.
Interest Coverage above 10
A strong interest coverage ratio helps ensure the business can comfortably handle its financing costs.
Operating Margin above 20%
A high operating margin helps confirm that the business is efficient, profitable, and structurally strong.
Price to Free Cash Flow below 30
We require a reasonable free cash flow valuation so that business quality is not paired with an excessively expensive stock price.
5-Year Free Cash Flow Growth at Least 0%
We require non-negative free cash flow growth over the last 5 years to avoid businesses with deteriorating cash generation.
Quality at a fair price stocks are companies with strong margins, returns on capital, cash generation, and financial health that still trade at reasonable valuations. The approach favors durable businesses without ignoring price.
High-quality companies can deserve premium valuations, but overpaying can reduce future returns. A quality at a fair price screen helps investors find US stocks where business strength and valuation are more balanced.
We start with US-listed stocks and apply a quality at a fair price screen inspired by Terry Smith-style investing. First, we use the standard liquidity filters to exclude very small and illiquid stocks. We then focus on companies with high gross and operating margins, strong cash conversion, consistent returns on capital, manageable debt relative to free cash flow, strong interest coverage, positive free cash flow growth, and a reasonable price-to-free-cash-flow ratio.
Investors looking for quality at a fair price stocks often search for businesses with strong pricing power, efficient operations, and reliable cash generation. Important signs include high gross and operating margins, healthy returns on capital, good cash conversion, manageable debt, and a valuation that is not excessive relative to free cash flow.
