Introducing EverHint Undervalued Stocks Scanner v2 — A Smarter Way to Find Deep Value

The Problem With Most Value Screeners

Most free (and even paid) stock screeners let you filter by PE ratio, maybe PB, maybe dividend yield. You set a threshold, hit "go," and get a list of 200 stocks that are statistically cheap — and half of them are cheap for a reason.

That's because single-metric screens don't distinguish between undervalued and distressed. A PE of 4 means nothing if the company is bleeding cash, has unsustainable debt, or is about to miss payroll. These are value traps, and they destroy portfolios.

We built the Undervalued Stocks Scanner v2 to solve this.

What Changed From v1

The original scanner (v1) used sector-specific hard filters: PE below sector average for tech, dividend yield above sector average for utilities, EV/EBITDA below sector average for energy, and so on. Each sector had its own hand-picked rule.

It worked — but it had real limitations:

• No ranking — stocks either passed or didn't. A barely-qualifying stock looked the same as a screaming bargain.
• Single-dimension — it only measured cheapness, not quality or catalysts.
• Rigid thresholds — a stock trading at 1% above the sector PE average was excluded entirely.
• No safety checks — cheap and bankrupt looked the same as cheap and healthy.

v2 is a complete rewrite. Instead of pass/fail filters, it uses a multi-layer scoring engine that ranks every qualifying stock on a 0–100 composite scale.

How the v2 Engine Works

Layer 1: Quality Gate (Pass/Fail)

Before any scoring happens, every stock must pass hard safety filters that eliminate obvious value traps:

• Return on invested capital > 5% — the business must generate real returns
• Debt-to-equity < 2x — leverage can't be out of control
• Interest coverage > 2x — the company can actually service its debt
• Income quality > 0.3 — reported earnings must be backed by real cash flow (not accounting tricks)
• Market cap ≥ $500M — institutional-grade liquidity only
• Excludes financials and real estate — these sectors have fundamentally different balance sheet structures that distort standard value metrics

Roughly 70–80% of the universe gets eliminated here. That's by design.

Layer 2: Value Score (0–40 points)

Stocks that survive the quality gate are scored on five valuation metrics, all percentile-ranked within their sector (so a cheap tech stock is compared to other tech stocks, not utilities):

• Earnings yield — how much earnings power you get per dollar
• Free cash flow yield — same thing, but using actual cash instead of accounting earnings
• PE ratio vs. sector median — classic relative valuation
• EV/EBITDA — enterprise-level cheapness, accounts for debt structure
• Price-to-book — asset-based floor valuation

Sector-relative ranking is critical. A PE of 15 is cheap for software but expensive for steel. The scanner knows the difference.

Layer 3: Safety Score (0–30 points)

This is where v2 separates from nearly every screener on the market. Cheap means nothing if the company is fragile:

• Piotroski F-Score (0–9) — the gold standard of financial health. Measures profitability, leverage changes, and operating efficiency across 9 binary tests. Scores of 7+ indicate strong fundamentals.
• Altman Z-Score — bankruptcy prediction model. Stocks in the "safe zone" (>3.0) get full credit; "grey zone" (1.8–3.0) gets partial; distress zone gets zero.
• Interest coverage — can the company pay its interest obligations comfortably?
• Current ratio — short-term liquidity health
• Low debt-to-equity — less leverage = more margin of safety

Layer 4: Catalyst Score (0–30 points)

A cheap, safe stock can stay cheap forever without a reason to re-rate. The catalyst layer identifies stocks with potential triggers:

• Price above 200-day moving average — institutional momentum confirmation
• RSI in recovery zone (30–60) — not overbought, showing signs of stabilization
• Insider buying in the last 90 days — management putting their own money in, tiered by conviction ($100K+ to $500K+)
• Upcoming earnings — potential re-rating event
• Healthy profit margins — operating leverage that can surprise to the upside

Final Output: Composite Score (0–100)

All three layers combine into a single composite score. The scanner outputs the top 10 stocks daily, ranked from highest to lowest. Every signal includes full transparency: you see the individual value, safety, and catalyst scores, plus the underlying metrics.

Bonus badges flag special situations:

• Graham Net-Net — stock trading below net current asset value (extreme deep value)
• Cash-Rich — cash per share exceeds 30% of the stock price
• Near 52-Week Low — within 10% of the annual bottom
• Insider Buying — confirmed management conviction

How It Compares to Other Screeners

The key difference: most screeners tell you what passed your filter. EverHint tells you how undervalued it is, how safe it is, and whether there's a reason for the market to notice — in a single ranked score, every trading day.

What This Scanner Is NOT

Let's be clear about what we don't claim:

• Not a trading system. There are no entry/exit rules, no backtested equity curves, no "guaranteed returns." This is a research tool that surfaces candidates.
• Not short-term. The holding period assumption is 3–12 months. Value investing requires patience. Cheap stocks can get cheaper before they re-rate.
• Not financial advice. Every signal is for educational purposes and independent research. Always do your own due diligence.

Try It

The Undervalued Stocks Scanner v2 runs daily and publishes results on EverHint. Each report includes the full signal table, per-stock breakdowns, insider activity, analyst estimates, and market context.

If you find it useful, a follow or share helps the project grow.

Independent, data-driven fundamental analysis. No hype. No promotions. Just experimental value research from EverHint.

This is not financial advice. See disclaimer and FAQs.