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Commentary ● October 7

Using Return on Equity to Screen for Profitable Stocks

Michael Rose

This week, we cover a strategy that identifies companies with strong return on equity (ROE) and give you a list of stocks that currently pass the AAII Return on Equity screen. Return on equity may help to reveal profitable firms, but does Wall Street reward the stock prices of these firms? As of September 30, 2026, the AAII Return on Equity screen has an average annual gain of 12.7% since inception in 1998, compared to the S&P 500 index’s 7.5% return over the same period.

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AAII Shadow Stocks
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Featured Member Strategy

AAII's Model Shadow Stock Portfolio

In 1993, we started a real-money portfolio to show that a consistent investment approach could be followed without a significant time commitment.

Learn our secrets to outpacing the overall market by nearly 2-to-1 over the past 10 years in our exclusive report, How to Win With a Small Cap/Value Approach.

Ranked P/B Ratio as of 10/8/2026

COMPANY NAME TICKER P/B RATIO
LanzaTech Global, Inc. LNZA 0.30
Regis Corporation RGS 0.38
Imperial Petroleum Inc. IMPP 0.41
StealthGas Inc. GASS 0.50
Shoe Station Group Inc. SHOE 0.52

See All 25 Stocks

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Premium Screens

PREMIUM STRATEGY ● See All Premium Screens

Stock Superstars Report Portfolio

Approach: James O'Shaughnessy

James O'Shaughnessy is the founder, chairman and chief investment officer of O'Shaughnessy Asset Management LLC. O'Shaughnessy is considered a pioneer in quantitative equity analysis. O'Shaughnessy has authored several books, including What Works on Wall Street (1997), for which he backtested 44 years of stock market data to find out which quantitative strategies have worked over the years and which haven't.

Top SSR Watchlist Ideas Ranked by
Value Score (as of 10/8/2026)

COMPANY NAME TICKER Value Score
Melco Resorts & Entertainment Limited MLCO 99
Embecta Corp. EMBC 98
Bread Financial Holdings, Inc. BFH 97
Greenlight Capital Re, Ltd. GLRE 96
Bausch Health Companies Inc. BHC 94

See All 20 Stocks

Stock Grades

A+ Stock Grades

Stocks with grades of B or better across all quant factors as of 10/8/2026.

COMPANY NAME TICKER VALUE GROWTH MOMENTUM EPS REV QUALITY SECTOR
Score Grade Score Grade Score Grade Score Grade Score Grade
American Eagle Outfitters, Inc. AEO 90 A 95 A 82 A 83 A 93 A Consumer Discretionary
APA Corporation APA 87 A 64 B 93 A 61 B 98 A Energy
CBIZ, Inc. CBZ 63 B 69 B 83 A 70 B 75 B Industrials
Crown Holdings, Inc. CCK 72 B 77 B 61 B 67 B 85 A Materials
Centene Corporation CNC 92 A 89 A 85 A 67 B 71 B Health Care

See All 23 Stocks

COMPANY NAME TICKER VALUE GROWTH MOMENTUM EPS REV QUALITY SECTOR
Score Grade Score Grade Score Grade Score Grade Score Grade
Abeona Therapeutics Inc. ABEO 14 F 1 F 31 D 29 D 5 F Health Care
American Superconductor Corporation AMSC 17 F 27 D 22 D 36 D 24 D Industrials
Arbe Robotics Ltd. ARBE 10 F 12 F 8 F 29 D 15 F Information Technology
Ardelyx, Inc. ARDX 25 D 29 D 20 F 32 D 35 D Health Care
Ares Management Corporation ARES 14 F 26 D 39 D 25 D 24 D Financials

See All 84 Stocks

Stock Upgrades and Downgrades

Stock Upgrades & Downgrades

Stocks with at least two upgrades or downgrades across all quant factors. Data as of 10/8/2026, compared to previous trading day.

COMPANY NAME TICKER VALUE GROWTH MOMENTUM EPS REV QUALITY SECTOR
Cooper-Standard Holdings Inc. CPS B ▲ D ▲ D ▲ C ▲ D ▲ Consumer Discretionary
Corteva, Inc. CTVA A ▲ NA ▲ NA ▲ NA ▲ C ▲ Materials
Megan Holdings Limited MGN A ▲ NA ▲ F ▲ NA ▲ D ▲ Industrials
Marker Therapeutics, Inc. MRKR D ▲ F ▲ C ▲ B ▲ F ▲ Health Care
Norwegian Cruise Line Holdings Ltd. NCLH B ▲ D ▲ D ▲ B ▲ C ▲ Consumer Discretionary

See All 8 Stocks

COMPANY NAME TICKER VALUE GROWTH MOMENTUM EPS REV QUALITY SECTOR
Atmus Filtration Technologies Inc. ATMU C ▲ A ▲ D ▼ D ▼ B ▲ Industrials
Brunswick Corporation BC B ▲ C ▲ D ▼ B ▼ B ▲ Consumer Discretionary
Carver Bancorp, Inc. CARV C ▲ F ▲ C ▼ NA ▲ F ▼ Financials

See All 3 Stocks

Monthly Top Performing Stock Lists

Top Dividend Growth Stocks for September 2026 | Free List from AAII

AAII's September 2026 dividend stock list identifies top dividend-paying stocks screened for reliable income and long-term growth potential. Download the free list, built on research-backed selection criteria.

By AAII Staff | September 2026

Best Small-Cap Stocks to Watch in September 2026 | Free AAII List

AAII's September 2026 small-cap value stock list identifies undervalued companies with strong fundamentals, screened using disciplined investment criteria. Download the free spreadsheet.

By AAII Staff | September 2026

What Are the Top Growth Stocks to Watch in July 2026?

See July 2026's top growth stocks, including CRWD, JNJ, AZO and ROL which are screened for strong earnings and momentum. Download the full list free

By AAII Staff | July 2026

Top Tech Stocks to Watch in July 2026

Discover top tech stocks for July 2026, including ASML, PEP and AMAT. Learn how to evaluate growth potential and get a free curated stock list.

By AAII Staff | July 2026

Top-Performing Value Stocks to Watch in June 2026

From General Motors and Delta Air Lines to Valero Energy and Fox Corporation, our June 2026 Value Stocks List showcases companies with attractive valuations and strong fundamental characteristics.

By AAII Staff | June 2026

Articles

First Cut Stocks,AAII Stock Ideas,Stock Strategies

All-Stars: Stocks That Pass Multiple Screens

A list of the stocks that passed the greatest number of AAII Stock Screens.

By John Bajkowski | October 2026

First Cut Stocks,AAII Stock Ideas,Stock Strategies

All-Stars: Stocks That Pass Multiple Screens

A list of the stocks that passed the greatest number of AAII Stock Screens.

By John Bajkowski | October 2026

First Cut Stocks,Stock Strategies

Spicy Stocks: High-Beta Stocks Showing Relative Strength

If you are looking for some excitement in your portfolio, these volatile stocks went from laggards to leaders.

By Sam Levine | September 2026

AAII Stock Ideas,Small Cap Value Investing

Tiny Titans Screen Targets Stocks That Institutions Miss

This micro-cap approach for the more aggressive investor focuses on undervalued stocks with strong relative momentum.

By John Bajkowski, Michael Rose | September 2026

First Cut Stocks,Market Actions

Best-Performing S&P Composite 1500 Stocks at Midpoint 2026

One of the clearest themes during the first half of 2026 was the remarkable breadth of the artificial intelligence (AI) investment cycle.

By John Bajkowski | August 2026