Company Events & EarningsExtended setexperimental liveNew

Sga Operating Leverage

Updated quarterlyData needs: lowshort only

2003

Anderson, M., Banker, R., Janakiraman, S. (2003). "Are Selling, General, and Administrative Costs 'Sticky'?" Review of Accounting Studies 8(2), 47-63. Extensions: Banker-Chen 2006, Weiss 2010.

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In plain terms

Companies whose overhead costs (SG&A) are growing faster than revenue are sitting on a hidden problem: when revenue softens, those costs don't drop as fast, so earnings get squeezed. Short the stock when this gap widens beyond 5-10 percentage points.

How it works

SG&A is sticky: when revenue falls, SG&A falls less-than-proportionally. Firms where SG&A growth has outpaced revenue growth carry a hidden operating-leverage liability that compresses earnings on the next revenue softening (operating de-leveraging effect).

Live results

5 times picked on its own · 9 times inside a blend (8 beat the stock) · updated 2026-06-06

This strategy is a frequent ingredient in blends that combine a few strategies on one stock. It has contributed to 9 such blended picks (8 of which beat simply holding the stock). Picking it on its own is only one of the ways it shows up.

How its picks scored vs. buy & hold

Each pick is graded on a recent year it was never tuned on, against simply owning the same stock

Where its edge concentrates

Share of picks in each company-size group that beat buy & hold

How often it trades

Active vs. patient. Bars on the left mean it waits for rare setups; bars on the right mean it trades often

Return vs. buy & hold

How much each pick beat or trailed simply owning the stock over the test year (extreme microcap moves trimmed)

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Data dependencies

Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
Key metrics
A data feed this strategy reads, refreshed on its normal schedule.

Expected edge

Reported return: -3 to -6% over 6-12mo
Tested over: T+1 to T+180d post-disclosure

Anderson-Banker-Janakiraman 2003; -3 to -6% over 6-12mo on top-decile gap.

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Beneish M Score ShortPrice & Market Behavior

Eight accounting red flags (sales receivables stretching faster than sales, margin compression, asset-quality drift, leverage jumps, accruals piling up) are combined into a single score. When the score crosses the manipulator threshold and the price chart already agrees, that's a short setup.

Gross ProfitabilityPrice & Market Behavior

Companies with high gross profit / total assets keep beating peers — it's the cleanest measure of 'is this business actually good'.

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