I don't see a real problem there. For any given company, a large number of relatively low-price shares is not obviously inferior to a small number of higher-price shares. Obviously having more shares will also decrease FCFPS, but it won't alter the ratio.

I agree. Reflecting on Elan’s response and your response, I realize that I was attempting to find a rational to support a pre-existing bias in spite of the backtester results. (No form points on that dive.) The other criteria in the screen keep one far removed from the penny stock considerations I brought up (and described poorly).

A better reason for favoring a minimum price in certain screens is a bit of self-fulfilling investor psychology. Historically investors have preferred stocks above $10 per share, and the option-availability rules and delisting rules are derived from that preference. Companies occasionally like to do a second public offering, and company executives typically hold a chunk of shares, so they like to keep their share price up in the preferred range. A company that can't do so is in some way a higher risk, either a young and unproven company or an older company in trouble... thus justifying the preference that started the cycle.

Great points. Thanks. I really appreciate your input. TLF