The most selective stock list on FairValueLabs. A stock enters the Strike Zone only when it's simultaneously undervalued, financially safe, and protected by a competitive moat.
Most stock screeners use a single dimension — lowest P/E, highest yield, or best momentum. The Strike Zone is a three-dimensional filter that requires a stock to pass all three of our core analysis engines simultaneously:
Positive margin of safety from our DCF model — the stock trades below our intrinsic value estimate.
Altman Z-Score above 1.8 — out of the bankruptcy distress zone. The company can survive a recession.
Moat rating of 3+ stars — the company has a competitive advantage protecting its profits.
When all three conditions are met, you've found what value investors call "a wonderful company at a fair price." These opportunities are rare — typically only a handful of stocks qualify at any given time out of our 98-stock coverage universe.
The value investing thesis in one sentence: buying undervalued stocks with safe balance sheets and durable competitive advantages has historically outperformed the market over long periods. This is the core strategy practiced by Buffett, Munger, and Graham — and the Strike Zone is its quantitative expression.
A stock must pass all three filters simultaneously: (1) Margin of safety above 10% — our valuation model says the stock trades at least 10% below fair value, (2) Altman Z-Score above 1.8 — not in the bankruptcy distress zone, (3) Moat rating of 3+ stars — the company has a measurable competitive advantage. Stocks with MOS above 15% enter the Strong Buy tier; 10-15% enter the Buy tier.
The list updates whenever new SEC filings are processed or stock prices change significantly. A stock can enter or exit the Strike Zone as prices move (changing the margin of safety) or as new financial data alters the Z-Score or moat rating. Typically 5-10 stocks qualify at any given time.
No. The Strike Zone identifies stocks that pass our three quantitative filters. It's a starting point for research, not a substitute for your own due diligence. Position sizing, portfolio diversification, sector exposure, and your personal risk tolerance all matter. Always read the individual ticker analysis page before making any investment decision.
We don't claim a specific success rate because past performance doesn't guarantee future results. The logic is simple: buying undervalued stocks with safe balance sheets and strong competitive advantages has historically outperformed over long periods. This is the core of value investing as practiced by Buffett, Munger, and Graham.
See the full undervalued and overvalued stock lists and learn how our DCF model works.
Understand which stocks are in the distress zone and why bankruptcy screening matters.
Deep dive into competitive advantage analysis: ROIC, margins, and switching costs.