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The week's question
In March 2025, in the thread "Re: OT, out", Umm asked the members: "Do you think it is because America is made up of magical soil that makes businesses based in America magically profitable?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Investment Strategies / Mechanical Investing
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Author: lizgdal ✶☼  😊 😞
Number: of 6243 
Subject: Re: profitability subsumes beta and value as a factor
Date: 04/10/25 9:55 PM
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No. of Recommendations: 8
There are 2 versions of the paper, one free and one costing $5. Profitability is:

(REVT−COGS−(XSGA−XRD)−XINT) / (BE+MIB)

REVT is Sales
COGS is Cost-of-Goods-Sold
XSGA is selling, general, and administrative expenses
XRD is R&D expenditure
XINT is interest expense

BE is book-equity
MIB is minority interest


So, roughly: (net income + R&D) / equity
or, ROE + R&D/equity
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This community has written 6,227 posts about Mechanical Investing. The article-length ones it recommended most:
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