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Classic Value Investors

Low on Extended Earnings Average

Low on Extended Earnings Average is a Classic Value Investors screen. It checks every NSE-listed stock against 3 conditions computed from nightly data, after excluding heavily pledged promoters and very small market caps. This page explains the rule, each figure and its source. It lists no stocks and is not advice.

What it does and why

Benjamin Graham's original method for spotting undervalued stocks was to divide the current price by the average earnings of the past 10 years rather than just last year's earnings. This smooths out the distortions of a single exceptional year or a single bad year. We implement this over 8 years (the depth of our FinEdge data), using the median rather than the mean — the median is more robust to India-specific distortions such as COVID-impacted years, GST transition, and discontinued operations. A stock trading below its normalised PE is one where the market is pricing in a weaker future than the company's own historical earning power suggests.

The rule, step by step

A stock must satisfy every condition below. Conditions are grouped under the pillar they test.

Normalised Value

  • Median EPS (5Y) is available
  • Median EPS (5Y) > 0
  • Close Price ÷ Median EPS (5Y) < 15

Hard excludes

  • Promoter pledge above 30% of the promoter's holding
  • Market cap below ₹500 crore
Passes the screen

Ranked by Close Price ÷ Median EPS (5Y), lowest first.

The figures it uses

Median EPS (5Y)

Used in a condition
Formula
Positive EPS of the most recent five years (at least three); the element at index n÷2 of the sorted list
Input fields
eps
Source of record
FinEdge · /api/v1/financials/{symbol}?statement_code=pl&period=annual
Corporate actions
Adjusted for corporate actions before use
Refresh
Recomputed nightly (06:30 IST job); rows older than 3 days are excluded from screens

Close Price

Used in a condition
Formula
Closing price of the latest daily bar, adjusted for splits, bonuses and other corporate actions
Input fields
close
Source of record
Upstox · public historical candles, NSE_EQ|{ISIN} (no auth)FinEdge · /api/v1/daily-quotes/{symbol} (fallback)
Corporate actions
Adjusted for corporate actions before use
Refresh
Recomputed nightly (06:30 IST job); rows older than 3 days are excluded from screens

Promoter Pledge

Hard exclude input
Formula
Pledged shares as a share of the promoter's own holding: pledgedSharesPct ÷ promoter holding × 100; blank when the quarter is not listed
Input fields
pledgedSharesPct, promoter holding
Source of record
FinEdge · /api/v1/shareholdings/summary/{symbol}?period=quarterlyFinEdge · /api/v1/shareholdings/pattern/{symbol}?period=quarterly
Refresh
Recomputed nightly (06:30 IST job); rows older than 3 days are excluded from screens

Market Cap

Hard exclude input
Formula
Close × paid-up equity shares ÷ 10,000,000 (₹ crore)
Input fields
close, paidUpEquityShares
Source of record
Upstox · public historical candles, NSE_EQ|{ISIN} (no auth)FinEdge · /api/v1/daily-quotes/{symbol} (fallback)FinEdge · /api/v1/shareholdings/summary/{symbol}?period=quarterly
Corporate actions
Adjusted for corporate actions before use
Refresh
Recomputed nightly (06:30 IST job); rows older than 3 days are excluded from screens

What each figure means

Current PE (Trailing 12 Months)

Current price divided by the sum of the last four quarters' earnings per share. This is the standard PE ratio as reported by most financial sites.

Low is better

Normalised PE (8-Year Median EPS)

Current price divided by the median annual EPS over the past 8 fiscal years. Using the median rather than the mean filters out exceptional years (COVID lows, one-time write-offs) without discarding the full history.

Low is better

Current PE Premium / Discount vs Normalised PE (%)

The percentage by which the current PE is above or below the normalised PE. Negative means the stock is trading at a discount to its historical norm — potentially cheap. Positive means it is at a premium.

Low is better

Try the rule

Type hypothetical values to see which conditions they satisfy. These are not real stocks and nothing here is stored.

  • Median EPS (5Y) is available—
  • Median EPS (5Y) > 0—
  • Close Price ÷ Median EPS (5Y) < 15—

Enter values to begin

How sensitive is it?

How many stocks pass if this threshold were set differently. Counts only; no stocks are named.

A worked example

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Evidence

What the harness measured

no_verified_figureNot yet tested

We have not measured this screen yet, so there is no record to explain.

Live monitoring

Not yet testable — 5 of 6 points needed to chart a rolling information coefficient.

  • 5-day IC -0.017 · signal date 2026-10-13 · n 4477
  • 22-day IC -0.022 · signal date 2026-09-10 · n 3881

This is a historical, statistical measurement produced by FINOME TECHNOLOGIES PVT LTD's research harness on past data. It is not a prediction, and past results do not indicate future results. The universe is today's Nifty 500 constituents, so the sample is affected by survivorship bias. It describes how a screen's selections behaved in the past and does not constitute investment advice or a recommendation.

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Rule version 1.0.0

Questions

How is this screen calculated?
Each stock is tested against 3 conditions using figures computed from exchange prices and company filings, adjusted for corporate actions. The rule is versioned; this page shows version 1.0.0.
How often does the screen update?
The figures are recomputed once each trading day after the nightly compute. A stock whose figures are more than three days old is left out rather than shown stale.
Is this investment advice?
No. This is educational material describing a screening method. It does not recommend any security and does not consider your circumstances.
Educational use only — GoQuant is a research tool. This page explains a screening method and is not a recommendation. Investment advice is provided by FINOME TECHNOLOGIES PVT LTD (AltQube), SEBI-registered Investment Adviser, registration no. INA000018373, under a signed advisory agreement and after a risk profile. Past performance is not indicative of future results.