High return on capital
EBIT divided by tangible capital employed. Greenblatt uses this instead of ROIC because it strips out goodwill and excess cash, leaving the real productivity of operating assets.
The Greenblatt-Fit Score is a 0 to 100 grade for how closely a stock fits Joel Greenblatt's Magic Formula: high return on capital combined with a high earnings yield. invest-like computes it for every US-listed stock.
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Greenblatt-Fit grades a stock from 0 to 100 against the two-factor Magic Formula Joel Greenblatt published in The Little Book That Beats the Market: rank stocks by return on capital (EBIT over tangible capital), rank again by earnings yield (EBIT over enterprise value), pick the top of the combined ranks. The score maps to an A+ to D grade ladder shared across all seven invest-like framework scores. Educational fit assessment, never advice.
invest-like pulls daily fundamentals, computes EBIT, the tangible capital base, and enterprise value for every eligible stock, then ranks the universe twice (once by return on capital, once by earnings yield). The lower the combined rank, the higher the Greenblatt-Fit Score. Each ticker gets a sub-score per factor with one paragraph of LLM-generated reasoning explaining the signal.
EBIT divided by tangible capital employed. Greenblatt uses this instead of ROIC because it strips out goodwill and excess cash, leaving the real productivity of operating assets.
EBIT divided by enterprise value. Captures the operating earnings a buyer would receive relative to the price paid for the whole business, debt and cash included.
Greenblatt ranks every stock by ROC, ranks again by earnings yield, sums the two ranks, and picks the lowest combined number. Buy 20 to 30, hold for one year, rotate.
Magic Formula explicitly excludes utilities, financials, and very small caps to keep the metrics comparable. invest-like applies the same universe filter.
The Magic Formula is the most replicable value strategy ever published. It is purely quantitative, free of subjective management calls, and Greenblatt's own 17-year backtest showed roughly 30 percent annual returns before fees. Treating Greenblatt-Fit as one of seven lenses surfaces high-ROC value at any moment in the cycle.
See the Magic Formula concept page at /learn/what-is-magic-formula/ for the underlying mechanics.
Every verdict page on invest-like shows the Greenblatt-Fit grade next to the other six framework scores.
Educational only. invest-like is not a registered investment adviser; nothing here is personalised investment advice. Always do your own research and consider your individual circumstances.