17 S&P 500 companies grew quarterly sales per share by at least 40% while expanding gross profit margins and operating margins, a combination the screen found in just 17 of the benchmark's roughly 500 constituents, or about 3% of the index. The source notes that a portion of those names trade at valuations that qualify as cheap.
What the screen required
The three conditions:
| Criterion | Threshold |
|---|---|
| Quarterly (QoQ) sales per share growth | At least 40% |
| Gross profit margin | Expanding |
| Operating margin | Expanding |
17 of roughly 500 S&P 500 members cleared all three simultaneously.
The 40% per-quarter SPS bar is demanding on its own. Gross margin expansion on top filters out companies growing revenue through volume while giving up per-unit pricing power. Operating margin expansion as a third condition identifies the names where top-line growth is actually flowing through to the operating line. All three had to hold at the same time.
A company posting 50% SPS growth with compressing margins does not make the list. One expanding both margin lines off a modest revenue base does not qualify either. The 17 represent a segment of the index where per-unit economics and operating cost structure are moving in the same direction at once.
The valuation angle
The source flags that some of these 17 stocks trade cheaply. No specific multiples are cited. Standard market logic prices rapid quarterly revenue growth and margin expansion at a premium. Names meeting both criteria that still register as inexpensive suggest the market has not fully priced the combination, or that near-term concerns are holding multiples below where the operating trend would otherwise support them.
Cheap valuation inside a 17-name list of margin-and-revenue growers is a tighter setup than cheap inside a broader screen. The per-share growth rate and the margin direction give the valuation case a floor to stand on.
Reading the screen
Applied separately, each of the three criteria would return a longer list across the S&P 500. The intersection of all three is where the count compresses to 17. That compression is the screen's argument.
The cheap names inside the 17 are what the market historically re-rates once quarterly results keep confirming the operating trend.