Quality Minus Junk
In plain terms
Score a company on four 'quality' dimensions — profitability, growth, low debt, dividend payout. The top 25% combo go long, the bottom 25% go short. Hold 3-12 months.
How it works
Composite QMJ score combining profitability (GP/A), growth (4Q YoY GP), safety (-D/E), and payout (|div|/NI), each ranked over trailing 8 quarters. Long top-quintile (composite percentile >= 0.75), short bottom-quintile (<= 0.25). AFP 2019 document +4-6% annual alpha on the long-short pair. Distinct from the existing #21 qmj which uses only GP/A + 12m momentum.
Live results
0 times picked on its own · 241 times inside a blend (211 beat the stock) · updated 2026-06-06Data dependencies
- Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
- Income statements
A data feed this strategy reads, refreshed on its normal schedule.
- Balance sheets
A data feed this strategy reads, refreshed on its normal schedule.
- Cash flows
A data feed this strategy reads, refreshed on its normal schedule.
Expected edge
- Reported return
- +4-6%/yr
- Tested over
- T+45d to T+252d
+4-6%/yr on long-short QMJ pair (AFP 2019).
Example tickers where this is likely to fire
Illustrative only, the signal fires based on the live data, not a fixed list.
Related families
Stocks whose gross profitability is improving versus their own past year AND that are trending up over 12 months get a long position; otherwise hold cash. A simplified single-stock take on the Quality Minus Junk idea; the full 4-factor composite is the quality_minus_junk family.
Companies with high gross profit / total assets keep beating peers — it's the cleanest measure of 'is this business actually good'.
Rank companies on two things: how little they spend on capex relative to assets (efficient investment) and how high their return on equity is. Top 25% combos go long, bottom 25% go short. Hold 3-12 months.
A 5-ratio score that flags bankruptcy risk. High score = safe (long); low score = distressed (short). The market-cap version of the original 1968 formula.
Explore Quality Minus Junk on alphactor.ai
See which tickers this family is currently firing on, with live signals and rankings.