Weiss Ratings screen highlights low-debt stocks outperforming the U.S. market

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Weiss: Low-debt stocks outperform

Highlights

Weiss Ratings identifies 20 low-debt, U.S.-listed stocks with Buy ratings and positive net income, all outperforming the S&P 500 in the last 30 days.
Despite the S&P 500 falling 2.7%, even the weakest screened stock, West Pharmaceutical Services, posts an 11.96% total return during the same period.
Healthcare constitutes seven of the 20 top-performing stocks, with Exelixis the only A-rated name and all but one achieving an Excellent solvency grade.

Screen criteria and market backdrop

As reported by Weiss Ratings, the stock screen targets companies with a current Weiss Buy rating of B- or better, a stable or improving rating index from a month earlier, positive net income over the trailing 12 months and a debt-to-equity ratio of 0.50 or less.

The list also requires a primary listing on a major U.S. exchange, market capitalization of at least $500 million, a share price of at least $5 and average daily trading volume of at least $2 million. Financial-sector companies are excluded because their balance sheets require a different approach to measuring leverage.

The review comes as the Philadelphia Stock Exchange Semiconductor Index falls 20% from early October to current, with Intel, Teradyne and Marvell each down 40% or more. Weiss says the drop in the 10-year Treasury yield, which falls roughly 45 basis points at its low point in early November, suggests investors are reacting not only to safety concerns but also to changing expectations for monetary policy and risk sentiment.

Sector mix and portfolio implications

Against that weaker market, every stock on the list posts a positive total return and beats the S&P 500 total return over the last 30 days. With the S&P 500 down about 2.7% over the period, even the weakest performer named, West Pharmaceutical Services at 11.96%, exceeds the index by nearly 15 percentage points.

Healthcare accounts for seven of the 20 stocks, followed by four industrials, three consumer discretionary names, two each in communication services and consumer staples, and one each in information technology and real estate. All but one have a Weiss solvency grade of Excellent, while McGrath RentCorp is rated Good and Exelixis is the only A-rated stock on the list.

Weiss says the screen is intended to broaden research beyond the direct AI infrastructure chain, where exposure can also reach equipment suppliers, construction companies and other businesses tied to continued capital spending. The firm adds that lower Treasury yields can help some companies through cheaper financing, but weaker demand can still pressure earnings, making financial strength a central factor in stock selection.

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