skills/idea-generation/references/screen-archetypes.md

# Screen Archetypes

Use this reference to choose the right screen logic and avoid treating all public-equity ideas as one factor rank.

## Long idea archetypes

### Quality compounder at a fair price

Find durable businesses that can compound value over multiple years.

Signals:
- High and durable ROIC/ROE/ROTCE.
- Organic growth with pricing power or reinvestment runway.
- Strong FCF conversion and clean accounting.
- Stable or expanding margins.
- Conservative balance sheet.
- Rational capital allocation.
- Valuation reasonable relative to growth, quality, and history.

False positives:
- Crowded ownership.
- Multiple still too high for slowing growth.
- FCF inflated by underinvestment or working capital.
- SBC, M&A, or accounting obscures true economics.

PM framing:
- Do not call this cheap just because it derated.
- Explain whether the entry point compensates for quality and durability.

### GARP / growth at a reasonable price

Find names where growth is attractive relative to valuation.

Signals:
- Above-peer growth.
- Valuation below growth-adjusted peer range.
- Positive revisions or resilient guidance.
- Margin stability or operating leverage.
- Moderate leverage and good FCF conversion.

False positives:
- Growth decelerating faster than consensus.
- Revenue quality weak.
- Competitive intensity rising.
- Market already expects acceleration.

### Revision inflection long

Find companies where earnings expectations may be turning upward.

Signals:
- First positive revisions after downgrade cycle.
- Guidance stabilization or raise.
- KPI improvement before EPS revisions fully catch up.
- Peers confirm demand improvement.
- Valuation still near trough or unchanged despite improved outlook.

False positives:
- One-time FX, commodity, tax, or accounting effect.
- Revisions driven by one analyst.
- Price already reacted more than estimates.
- Late-cycle bounce mistaken for durable improvement.

### Derated quality / temporary dislocation

Find good businesses sold off for reasons that may be temporary.

Signals:
- Large drawdown or relative underperformance.
- Quality metrics intact.
- Balance sheet strong.
- Estimate reset likely complete.
- Catalyst for narrative repair.

False positives:
- Structural impairment.
- Management credibility broken.
- Competitive moat weaker than history suggests.
- Margin or growth reset not finished.

### Self-help / margin expansion

Find companies where internal actions can drive earnings independent of macro.

Signals:
- Cost program, restructuring, new CFO/CEO, portfolio simplification, pricing discipline, procurement savings, SG&A leverage, mix shift.
- Consensus does not fully reflect target savings or margin bridge.
- Management credibility and measurement path are clear.

False positives:
- Savings already in consensus.
- Revenue deterioration offsets costs.
- Execution history poor.
- Restructuring costs recurring.

### Capital allocation catalyst

Find companies where capital deployment may change market perception.

Signals:
- Excess cash or underlevered balance sheet.
- New buyback, dividend, leverage target, asset sale, divestiture, or M&A discipline.
- Activist pressure.
- High FCF yield and clear shareholder return capacity.

False positives:
- Governance blocks action.
- Empire-building management.
- Capital trapped or restricted.
- Cyclical FCF overestimated.

### Sum-of-the-parts / hidden asset value

Find companies where consolidated valuation obscures asset or segment value.

Signals:
- Multiple segments with different peer sets.
- Non-core assets, stakes, real estate, infrastructure, or unconsolidated assets.
- Possible spin, divestiture, simplification, or activist pressure.

False positives:
- Holding-company discount justified.
- Taxes/leakage high.
- Segment disclosure inadequate.
- No catalyst to close discount.

### Post-earnings overreaction long

Find names where the market reaction appears disproportionate to fundamental change.

Signals:
- Large price move on small estimate change.
- Misread KPI or temporary issue.
- Guidance conservative.
- Peer read-throughs supportive.
- Management commentary better than headline results.

False positives:
- Market correctly repricing long-term risk.
- Management credibility damaged.
- Hidden quality issue or new disclosure.

## Short idea archetypes

### Over-earning / peak-margin short

Find companies with earnings above normalized level.

Signals:
- Margins above history or peer norms.
- Temporary pricing, inventory, freight, commodity, stimulus, or demand pull-forward benefit.
- Consensus extrapolates peak earnings.
- Valuation support depends on unsustainable denominator.

False positives and risks:
- Peak lasts longer than expected.
- Buybacks support EPS.
- Low float or crowded short.
- Takeout or strategic interest.

### Deteriorating revisions short

Find companies with estimate risk not fully reflected.

Signals:
- Negative revisions beginning or accelerating.
- KPI deterioration, guidance risk, channel weakness, negative peer read-throughs.
- Valuation remains high or stock has not de-rated enough.

False positives and risks:
- Bar already reset.
- Easy comps ahead.
- Cost cuts offset revenue weakness.
- Market looks through near-term pressure.

### Quality trap

Find companies priced as high quality while fundamentals degrade.

Signals:
- Margin pressure, churn, slowing bookings/orders, working capital stress, falling returns, management turnover, aggressive adjustments.
- Narrative remains strong despite evidence.

False positives and risks:
- Temporary investment cycle.
- Strong moat absorbs pressure.
- Activist or M&A event.

### Balance sheet / refinancing short

Find names where equity may not reflect credit risk.

Signals:
- High leverage, maturity wall, rising interest expense, weak FCF, covenant pressure, poor liquidity, debt trading down, spread widening.

False positives and risks:
- Refinancing window reopens.
- Asset sale or sponsor support.
- Liability management transaction.
- Equity dilution may fix credit risk but change short thesis.

Route to Credit Markets when capital structure analysis matters.

### Narrative / valuation excess short

Find companies where expectations are heroic relative to fundamentals.

Signals:
- Extreme multiple, low FCF, insider selling, promotional narrative, sell-side optimism, weak unit economics, decelerating growth.

False positives and risks:
- Momentum/squeeze.
- Real technological inflection.
- Retail/options flows.
- Strategic buyer.

### Accounting / cash-conversion short

Find companies where reported earnings may overstate economics.

Signals:
- High accruals, receivables growing faster than revenue, inventory build, capitalized costs, repeated one-time add-backs, weak FCF conversion, auditor issues, related-party transactions.

False positives and risks:
- Accounting concerns lack near-term catalyst.
- Market ignores complexity while growth continues.
- Company improves disclosure or cash conversion.

## Relative-value and pair archetypes

### Peer mispricing

Compare companies with similar exposures and diverging valuation or revisions.

Evaluate:
- Growth, margins, ROIC, revisions, balance sheet, catalysts, liquidity, ownership, valuation, and factor exposure.

Output should explain why the spread exists and why it should close or widen.

### Long quality / short deteriorating peer

Use when market beta or sector exposure should be neutralized.

Screen for:
- Long candidate with better durability, cleaner revisions, or stronger balance sheet.
- Short candidate with weaker revisions, worse quality, or overstated earnings.
- Basis risk: different end markets, geography, customer base, liquidity, beta, and factor exposures.

### Basket idea

Use when the theme is broader than one name.

Output:
- Long basket, short basket, or paired baskets.
- Common thesis and name-specific caveats.
- Factor/correlation risks.

Route to `portfolio-risk-management` for hedge construction and basis-risk work.

## Catalyst and event archetypes

Use when timing or event outcome drives the setup more than steady-state fundamentals.

Events:
- Earnings, guidance, analyst day, product launch, regulatory decision, litigation, M&A, spin, divestiture, activism, buyback, dividend, index change, debt refinancing, restructuring, management change, strategic review, macro print, commodity inflection, FDA/clinical event.

Classify:
- Hard vs soft catalyst.
- Timing and probability.
- Magnitude and directionality.
- Whether priced.
- Path dependency and downside if failed/delayed.

Route complex events to `event-driven-analyzer`.

## Watchlist archetypes

Use watchlist status when the business or setup is interesting but not actionable.

Common watchlist triggers:
- Attractive company but valuation too high.
- Cheap stock but revisions still negative.
- Catalyst timing unclear.
- Data gap unresolved.
- Liquidity/capacity insufficient.
- Need one more print, guide, regulatory decision, or management proof point.

Output the exact condition that would move it to active research.

## Mandate-Specific Screens

Long-only screens should evaluate benchmark relevance, active weight, quality durability, downside, and liquidity. Hedge fund screens should evaluate catalyst, shortability, borrow, crowding, and gross/net fit. Sell-side screens should evaluate rating-change potential, estimate revisions, and client relevance. ETF/index screens should evaluate methodology, constituent weight, rebalance effects, passive flow, factor exposure, and liquidity.