Simplifying The Green Screens

As 2024 nears its end, I'm announcing some tweaks to the Green Screen methodology.

Up until now, we've had 2: the "Tortoise" side of the screen, and the "Hare". On the Tortoise side, we were easing up on the revenue growth expectation (minimum 10%+), but requiring a more mature free cash margin (15%+). On the Hare side, we were requiring more growth (20%+) in exchange for a baseline of at least minimally positive free cash flow (> $0).

While this offered a nice mix of stable options along with faster-growing ones, I want to focus the site a bit more, and simplify the screen listing.

With that in mind, here are the changes active as of now:

1. Tortoise screen has been removed. There is now just a single screen.
2. Requirement for current year > 20% growth has been removed. A stock now only has to have estimates of 20% growth for the next fiscal year. This better aligns with our forward-looking mentality and in any case, the current year provision wasn't really providing much value as far as screening out "bad" stocks.
3. $1 billion min market cap removed. The minimum market cap is now $250 million. This provides a greater array of smaller, potentially larger-reward options.

Overall, I'm focusing GreenDot Stocks more towards "profitable growth". Of all factors that determine long-term winning stocks, sustainable revenue growth is far and away the #1 factor. Adding a free cash flow provision further hardens our screen against low-quality growth. And of course, I'll continue to do detail reviews before any gets added to the Watch List.

As a result of this, you'll find that the Watch List has gotten whittled down quite a bit. I only plan to list Watch List stocks that are currently a part of the Green Screens in any given week. This keeps our selection "lean and mean".

Here's to 2025 being another successful year for all of our investing endeavors! I will have a 2024 year-in-review up for New Year's. Happy Holidays!