Frequently asked questions

The Acquirer’s Multiple® is the valuation ratio an acquirer would use to find an attractive takeover target. It looks at what a buyer actually pays for the whole business, including debt, preferred stock and minority interests, against what the business earns from its operations.

The lower the multiple, the cheaper the stock. It comes from the research in Deep Value and is explained in The Acquirer’s Multiple.

It differs from the Magic Formula® earnings yield and the ordinary enterprise multiple because it uses operating earnings, built from the top of the income statement down, in place of EBIT or EBITDA. That makes companies, industries and sectors comparable, and leaves out one-off items that the company doesn’t expect to recur.

All figures use trailing twelve-month or most recent quarter data.

A close cousin of The Acquirer’s Multiple®, also used to find takeover candidates. It adds back depreciation and amortization:

OIBDP (operating income before depreciation) stands in for EBITDA, for the same reason operating earnings stand in for EBIT: it’s built from the top of the income statement down, so it’s consistent across companies and free of one-off items.

All figures use trailing twelve-month or most recent quarter data.

The total cost of buying the whole company: the shares, plus the obligations a buyer takes on, less the cash it gets.

It’s a truer price tag than market cap alone, because an acquirer has to take on the debt, preferred equity and minority interests too.

All figures use trailing twelve-month or most recent quarter data.

Market capitalization is the total value of a company’s common equity: the share price multiplied by the number of shares outstanding.

Operating earnings estimate the income flowing to a company’s owners before the effects of how it’s financed, so a company carrying debt can be compared like-for-like with one that isn’t. It’s our stand-in for EBIT (earnings before interest and taxes).

EBIT is usually worked out from the bottom of the income statement up, adding interest and taxes back to net income, so it carries along one-off gains and losses. Operating earnings are built from the top down, which keeps the figure consistent across companies and limited to the business’s operations. We use operating earnings to calculate The Acquirer’s Multiple®.

The line item is operating income after depreciation (OIADP).

OIBDP is operating income before depreciation and amortization, our stand-in for EBITDA (earnings before interest, taxes, depreciation and amortization).

Like operating earnings, it’s built from the top of the income statement down, so it’s consistent across companies and free of one-off items. It also adds back depreciation and amortization: non-cash charges that reflect past spending, and cash that management can, in any given year, direct to other uses such as paying down debt or making acquisitions.

We use OIBDP to calculate the enterprise multiple.

Four, each ranked by The Acquirer’s Multiple®, cheapest first:

• Large Cap 1000: the cheapest of the 1,000 largest US-listed stocks and ADRs. Free with an account.
• All Investable: every investable US-listed stock and ADR, large and small.
• Small and Micro Cap: the smaller half of the market, excluding over-the-counter stocks. More volatile, with higher returns historically.
• Canada All TSX: the cheapest stocks on the Toronto Stock Exchange.

Each screen has 30 tracked picks. Financials and utilities are excluded from the screens as of November 2026 (they were included from 2022). For background, see the guide to the stock universes.

There are two basic approaches: the business owner and the quantitative investor.

The business owner treats the screen as a starting point for research, looking at each stock as a business. They buy only when the price is far enough below a conservative estimate of intrinsic value to give a margin of safety, and pass otherwise.

The quantitative investor buys the screen as a portfolio and relies on its performance as a whole, taking the stocks without fear or favor and ignoring the particular troubles of any one of them.

Read more in How to use the screeners.

Each screen tracks 30 picks, but you don’t need to hold all 30. More stocks means more diversification and less volatility, but more trades to manage. Fewer stocks means fewer trades, but a bigger hit from any one surprise. As a rule of thumb, hold at least 20.

Historically, the Large Cap screen has delivered lower volatility and lower returns; Small and Micro Cap, higher returns with much bigger swings; and All Investable, the best balance of the two. Leave out any stock you don’t want to own, for any reason.

Read more in Four steps to implementing a quantitative value investment strategy, and see how the screens have done on the track record.

Each column’s definition is in updates to the screeners. On a stock’s page, the definitions of every figure are listed at the foot of the page.

Sign up with just your email to get the full Large Cap 1000 screen, every Large Cap stock’s page of numbers, and a CSV download of the screen. You’ll also get our newsletter, and you can unsubscribe at any time.

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All four screens, the AI analyst’s reports and stock write-ups, the chance to ask the analyst questions about any stock in the screens, and downloadable tear sheets. Membership is $49 a month or $499 a year.

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After each screen update, the AI analyst reads the latest filings, news and price moves for the stocks in the screens and writes up what changed and why it matters for a value investor. Every figure it quotes is checked against the data before it’s published. Its reports are for members.

Yes. Members can ask about any stock in the screens from the Ask the analyst box on its page: why it moved, what the numbers mean, what could close the gap to value. Answers use the stock’s figures and cite their sources.

Anyone with a free account can ask about value investing, The Acquirer’s Multiple® or how the screens work in Ask the analyst below. Questions and answers are shared for all readers, without your name. The analyst explains; it never gives buy or sell advice.

Yes, any time, from your account page. The yearly plan comes with a 30-day money-back guarantee.