The Hunt for the “100-Bagger": From Theory to a Working Screener
Can Christopher Mayer’s legendary "100-Bagger" principles be automated? This article explores the transition from the theory of 100-to-1 returns to a functional, quantitative screener.
The Hunt for the “100-Bagger"
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Can Christopher Mayer’s legendary "100-Bagger" principles be automated? This 'Trading Idea' explores the transition from the theory of 100-to-1 returns to a functional, quantitative screener.
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Stock Screener Settings
ROICexc(5y)>=15%
This is the heart of the strategy. The single most critical ingredient in a 100-bagger is the ability to earn high returns on capital and, crucially, the ability to reinvest those profits at similarly high rates.
GM>=30%
High margins are proof of a competitive advantage. Companies that must compete on price (low margins) rarely have the breathing room to become 100-baggers.
(marketCap<=2000000000)
Mayer wrote the book in 2015 and used an upper limit of $1 billion. Partly due to inflation, you can raise that threshold to $2 billion to find more candidates, but remember: the smaller, the better! In this screener, we use a maximum market cap of $2 billion.
ROE(5y)>=15%
This is the heart of the strategy. The single most critical ingredient in a 100-bagger is the ability to earn high returns on capital and, crucially, the ability to reinvest those profits at similarly high rates.
Revenue growth 5Y>=10%
Without ongoing expansion, you’ll never reach 100-bagger status. The screener looks for organic revenue growth of at least 10% per year (5-year average).
Ins Owners>=10%
We’re looking for entrepreneurs, not managers. That’s why we filter for companies where insiders own at least 10% of the shares.
Dividend Yield<=1%
For a 100-bagger, a dividend is a “leak” in the growth engine. We want the company to reinvest every earned dollar internally
Chart Settings
Daily standard view
Regional Run
Run this screen in your favorite region. You can always further fine tune the screen by changing the general settings after it opened in the screener.