There is a line from Epictetus that I have thought about more times than I can count over thirty years of doing this work. He said, “Make the best use of what is in your power, and take the rest as it happens.”

Most investors are waiting for perfect. They want every indicator green, every box checked, every tailwind blowing in the right direction before they will touch a position. I understand the impulse. I had it myself for years.

While I was sitting there waiting for perfect, some of the best investments I ever made were sitting right in front of me, waving their arms, wearing two of the four characteristics I was looking for and begging me to pay attention.

So let me tell you what I actually learned, rather than what sounds tidy in a framework document.

The Four Pillars are real. Valuation, credit quality, fundamental momentum, and price trend are each independently valid ways to identify stocks with the potential to deliver serious returns. The academic evidence on this goes back decades and holds up across markets, time periods, and geographies.

I am not going to argue with Fama and French and Novy-Marx and Asness all at once. They are right.

But in 30 years of actually doing this with real money, I have found all four pillars aligned in a single stock about as often as the Orioles have won the World Series. Which is to say, it has happened, but you should not structure your entire life around waiting for it.

What I have found is that two pillars, the right two pillars, is enough. More than enough. And understanding which two pillars work best together is where the real edge lives.

Before we get to the combinations, let me run through each pillar quickly so we are speaking the same language.

Valuation is the foundation. It is Benjamin Graham’s margin of safety in modern dress. I want to buy assets for less than they are worth, whether that is measured by price-to-tangible book, price-to-earnings, EV-to-EBITDA, or net asset value. In community banking, where I have spent most of my career, that means price-to-tangible book below 0.90. In other sectors, the metric changes but the principle does not. You do not pay full price for anything. Ever.

Credit quality is the filter. Every value trap in the history of the market looked cheap for a reason, and that reason was usually a balance sheet that was quietly disintegrating. Strong equity ratios, manageable debt loads, non-performing assets under control. At the macro level, this pillar also tracks the credit environment itself — the ICE BofA High Yield spread, the AA corporate spread, the CCC tier. Credit markets know things before equity markets admit them. Pay attention.

Fundamental momentum is the evidence of improvement. Earnings estimates rising. Revenue accelerating. Margins expanding. Insider buying picking up. Robert Novy-Marx showed in his research on gross profitability that businesses actively getting better are disproportionately rewarded. We are not interested in what the company was. We are interested in what it is becoming.

Price trend is the confirmation. Fundamental momentum and price momentum operating together — what the academic literature calls twin momentum — produce returns that exceed the sum of the two parts separately. When the market is beginning to agree with what the fundamentals already showed, that is a powerful signal.

Four pillars. All real. All worth having.

Now here is the part they do not tell you in the brochure.

The Combination That Protects You: Value Plus Credit

If I had to build a two-pillar portfolio from scratch and I was primarily concerned with not losing money, the combination I would choose every time is value and credit quality.

This pairing is what keeps you out of the graveyard. The history of value investing is littered with investors who found something genuinely cheap, bought it with conviction, and then watched the cheap get cheaper as the balance sheet quietly crumbled beneath them.

Sears was cheap for years. And then it was dead.

Cheap is not a catalyst. Cheap attached to a deteriorating credit profile is a slow disaster with good-looking entry prices.

When you combine rigorous valuation discipline with a genuine credit quality screen, something specific happens. The universe of candidates shrinks dramatically, because a lot of things that look cheap are cheap precisely because the balance sheet does not justify a higher price. What remains is a smaller, cleaner group of businesses that are genuinely undervalued relative to the quality of their assets and their ability to survive adversity.

Marcus Aurelius put it plainly: “Never esteem anything as of advantage to you that will make you break your word or lose your self-respect.”

The investing equivalent is equally plain. Never esteem a cheap stock that is going to make you break your analysis and pretend the leverage does not matter.

Value plus credit is a patient strategy. These positions do not always move quickly. You may hold something at 70 cents on the dollar for 18 months before the market catches on. But the failure rate is dramatically lower than pure value investing, the drawdowns are shallower, and when the acquisition offer arrives or the earnings inflect or the sector gets re-rated, the payoff is real.

Strong balance sheet, genuine discount to tangible book value. That is the whole screen. That is the combination.

The Combination That Accelerates You: Fundamental Momentum Plus Trend

If the first combination is about not losing money, the second combination is about making a lot of it, relatively quickly.

Fundamental momentum plus price trend is the twin momentum framework, and the research on this is genuinely striking. The work from Huang, Liu, Rhee, and Zhang showed that combining fundamental and price momentum produced monthly returns of 2.16%, which exceeded the sum of the two applied separately.

There is something that happens when the underlying business is improving and the price is already confirming it. The market is not ahead of you and it is not behind you. You are moving together.

I grew up watching Earl Weaver manage the Orioles, and Weaver had a philosophy that applies here perfectly. He did not try to manufacture runs with bunts and stolen bases and small ball. He waited for the three-run home run. The three-run home run is what happens when you have both fundamentals and trend aligned. The fundamentals are the swing. The trend is the launch angle.

When both are right, the ball goes a long way.

What you are looking for in this combination is evidence that something has changed in the business, not just in the price. Earnings estimates moving up. Insider buying. Revenue acceleration. Margin improvement. Then the price chart confirming that other investors — with more information or better timing or simply fresher eyes — have already started to notice. The trend is not the reason to buy. The trend is the confirmation that the fundamental case is real and that you are not arguing alone.

This combination is where the momentum names in the small-cap space tend to produce their biggest returns. A company with genuinely improving fundamentals and a price that has already broken to new highs is not a crowded trade. It is a business doing something right that the broader market is just beginning to recognize.

Get there before the recognition becomes consensus, and you have something.

Using Benzinga Pro to Find Both Combinations

Now, the practical question. How do you find these stocks without spending your entire week on manual research?

Benzinga Pro is built for exactly this kind of multi-factor screening, and the key is that you run two separate screens rather than trying to find all four pillars in one pass.

For the value-plus-credit screen, start with the valuation filters. Price-to-book, price-to-earnings, EV-to-EBITDA, and price-to-free-cash-flow are all included in the composite Value ranking. Set conservative thresholds and let the screen build a universe of genuinely cheap names. Then layer in the balance sheet criteria — equity ratios, debt loads, coverage ratios, liquidity — all found in the Piotroski F-score and Altman Z-score.

What you are left with after both filters is a short list of businesses that are cheap for the right reason — neglect or misunderstanding — rather than cheap for the wrong reason, which is a balance sheet quietly heading toward a bad outcome. The Benzinga Pro news flow and credit spread monitoring helps you maintain the macro overlay, watching the high yield environment to confirm that broader credit conditions support the thesis.

For the fundamental-momentum-plus-trend screen, you are using different tools. The Growth ranking combined with strong short-term sales and EPS rankings surfaces companies with strong fundamental momentum. The trend filters do the rest.

What Benzinga Pro compresses is the time it used to take to assemble all of this manually. The screens that used to take a week of data gathering now take an afternoon. That leaves more time for the part that matters — the actual analysis of whether the cheap company is genuinely good, and whether the improving company is genuinely sustainable.

The Honest Accounting

I want to be direct about something before I close.

If you find all four pillars aligned in a single stock, buy as much of it as your portfolio discipline allows. That combination is rare and should be treated accordingly. It is the highest-probability setup the framework produces, and when it appears, it tends to produce results that look, from the outside, like extraordinary luck — but are actually just what happens when you have every variable working in your favor simultaneously.

But do not wait for all four. The market does not dispense perfect opportunities on a schedule that fits your patience.

Two good pillars, the right two pillars, will make you a very good living. Value and credit quality will keep you out of the disasters that have ended careers and wiped out portfolios. Fundamental momentum and price trend will get you into the accelerators before the crowd shows up and prices out the return.

Aristotle taught that virtue is a mean between extremes — the quality that exists in the space between too much and too little. In investing, the virtue is knowing when you have enough to act.

Waiting for all four when you have two strong ones is not discipline. It is the paralysis that masquerades as discipline.

You have the framework. You have the tools. Two strong pillars are standing.

Build on them.

5 Stocks Passing the Value and Credit Screen

IAMGOLD Corp. (NYSE:IAG)
A mid-tier gold producer with operating mines in West Africa and the Americas, IAMGOLD is leveraged to rising gold prices while trading at a discount to its net asset value, with the ramp-up of the Côté Gold mine in Ontario providing a significant production growth catalyst that the market has not yet fully priced in.

Tredegar Corp. (NYSE:TG)
A Richmond, Virginia-based industrial manufacturer operating two distinct businesses — plastic films for personal care and specialty packaging, and aluminum extrusions for construction and transportation markets — Tredegar trades at a deep discount to the sum-of-its-parts value while generating steady cash flow that the market has chosen to ignore.

Fresh Del Monte Produce (NYSE:FDP)
One of the world’s most fully integrated fresh produce companies, Fresh Del Monte grows, ships, and markets bananas, pineapples, fresh-cut fruit and vegetables, and prepared foods under the iconic Del Monte brand across North America, Europe, the Middle East, and Asia, with a recently expanded footprint from the Del Monte Foods bankruptcy asset acquisition.

Urban Outfitters (NASDAQ:URBN)
The Philadelphia-based specialty retailer operates the Urban Outfitters, Anthropologie, and Free People brand families across roughly 700 North American and European locations, generating consistent free cash flow at a valuation that reflects the market’s broad skepticism toward discretionary retail rather than any company-specific deterioration.

HF Sinclair (NYSE:DINO)
A diversified independent refiner and marketer running seven refineries across the mid-continent and Rockies, HF Sinclair combines crude processing capacity with a growing renewables segment and the Sinclair-branded lubricants and fuel distribution business acquired from the Sinclair Oil merger.

5 Stocks Passing the Fundamental Momentum and Trend Screen

BlackBerry (NYSE:BB)
Once the dominant name in enterprise smartphones, BlackBerry has reinvented itself as a pure cybersecurity and embedded software company, with its QNX operating system deeply embedded in automotive systems and its Cylance AI-driven endpoint security platform generating recurring revenue that the market continues to undervalue relative to its installed base.

Vince Holding (NASDAQ:VNCE)
A New York-based luxury lifestyle brand known for its minimalist, elevated essentials in apparel and accessories, Vince has been executing a direct-to-consumer pivot that is improving margins and brand control while the stock trades at a fraction of what a strategic acquirer would pay for the name and the customer list.

Valley National Bancorp (NASDAQ:VLY)
A Wayne, New Jersey-headquartered regional bank with over $64 billion in assets and more than 200 offices across the Northeast, Florida, and other Sun Belt markets, Valley National has posted consistent tangible book value growth well above its peer median while maintaining solid credit quality and a CET1 capital ratio approaching 11%.

LATAM Airlines Group (NYSE:LTM)
The dominant airline holding company across Latin America, operating passenger and cargo services to 160 destinations in 27 countries through affiliates in Brazil, Chile, Colombia, Ecuador, and Peru, LATAM emerged from bankruptcy restructuring with a cleaner balance sheet and is now generating the kind of free cash flow yield that has Wall Street upgrading the name across the board.

Tactile Systems Technology (NASDAQ:TCMD)
A Minneapolis-based medical technology company selling pneumatic compression devices and airway clearance systems directly to patients managing chronic venous disease, lymphedema, and respiratory conditions at home, Tactile Medical is guiding for 9% to 12% revenue growth in 2026 as its direct sales force expands reimbursed patient access across a vastly underpenetrated addressable market.