You do not need to be a professional investor to beat the market. This post shows you how one simple, data-driven strategy - Qi Value - outperformed the market by over 8 times from 2001 to 2024. You will learn which four proven ratios drive the results, how to find the top 30% of undervalued stocks, and how to avoid value traps using momentum and quality filters.
Best of all, you can apply this strategy in minutes using the Quant Investing stock screener. If you want better returns with less stress, this article shows you exactly how to start.
Estimated Reading Time: 6 minutes
Qi Value Investment strategy back test 2021 to 2024
How One Simple Strategy Beat the Market by 8X
You do not need to pick stocks like a Wall Street pro to get world-class results. You just need to follow a simple, research-backed system.
This article shows you how the Qi Value strategy delivered a 1,665% return over 24 years, just under 7 times the market. You will learn what it is, why it works, and how to apply it in your own portfolio today.
Most Valuation Ratios Have a Weak Spot
You know the common value metrics Price to Book, PE ratio, and so on. But here is the problem: Price to Book, once the darling of value investing, has underperformed for years.
That is why we built something better: a composite of the most reliable valuation ratios, with an added ratio that lets you find companies with low traded value, most likely ignored by most big portfolio managers and hedge funds.
Meet Qi Value: A Better Way to Find Undervalued Stocks
Qi Value ranks companies by four of the best ratios we tested.
It includes:
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EBITDA Yield = EBITDA / Enterprise Value – The higher the better
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Earnings Yield = EBIT / Enterprise Value – The higher the better
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FCF Yield = Free Cash Flow / Enterprise Value – The higher the better
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Qi Liquidity = Adjusted Profits / Yearly Trading Volume – The higher the better
Each ratio views valuation from a different angle. Combined, they give you a complete picture.
24 Year Backtest Results: 2001–2024
From May 2001 to December 2024, Qi Value returned +1,665.2% while the MSCI World Index delivered just +242.5%.
Qi Value beat the market by more than 8 times and crushed other popular ratios:
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Price to Book: +1475.7%
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Earnings Yield (Ebit / EV): +1398.4%
Qi Value also had:
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The highest CAGR
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The lowest volatility
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The highest Sharpe ratio, meaning better returns per unit of risk
Qi Value Works Across Time
This is not a one-period wonder.
Even though it was not the best performer every year it stayed strong and consistent. This led to the best returns over the long term.
To start using Qi Value in your portfolio now - Click here
How to Use Qi Value in Your Portfolio
It is extremely easy to start using Qi Value in your portfolio today using the Quant Investing Stock Screener.
Step-by-step:
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Open the Screener
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Click the dropdown list under Primary Factor
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Under “Valuation,” select “Qi Value” as one of your four filter sliders
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Set the range slider from 0% to 30% to find the 30% most undervalued companies
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Click Apply to run the screen to get your stock list
Make It Even Better: Combine with Other Filters
Avoid Value Traps with Momentum - Look for undervalued stocks with rising prices using:
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Price Index 6 months
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Price Index 12m – 1m
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Adjusted Slope 125/250d
Improve Quality with Piotroski F-Score
Add a quality filter like the Piotroski F-Score (select 0% to 30%) so you only invest in companies with strong and improving financials.
Key Takeaways: What to Do Next
You now know how Qi Value works and why it beats the market.
· It uses four proven ratios
· It avoids the flaws of traditional single ratio strategies like Price to Book
· It has outperformed all major ratios since 2001
· It is easy to apply using the Quant Investing screener
Your Next Step: Put Qi Value to Work
If you want to beat the market without spending hours analysing stocks, use the same tool we built and use ourselves.
Sign up for the Quant Investing Stock Screener. It gives you access to Qi Value, 110+ other ratios, and coverage of over 22,000 global stocks.
👉 Start your subscription today – it costs less than lunch for two and could transform your portfolio. Ready to invest smarter? Let’s go.
To start using Qi Value in your portfolio now - Click here
FREQUENTLY ASKED QUESTIONS
1. How is Qi Value different from just using the PE ratio or Price to Book?
Most single ratios look at one part of a company. Qi Value combines four strong ones: EBITDA Yield, Earnings Yield, FCF Yield, and Liquidity. You get a fuller picture. This helps avoid traps where a stock looks cheap on one ratio but is risky or weak elsewhere.
2. I am not great with maths or finance. Can I still use Qi Value?
Yes. The Quant Investing screener does all the calculations for you. Just set Qi Value as one of your filters and move the slider to see the best-value stocks. No need to calculate anything yourself.
3. What makes Qi Value so powerful?
It ranks stocks using four angles of valuation. That is like getting a second, third, and fourth opinion before buying. Backtests show it beat the market by 8X over 24 years, with lower risk. That is rare.
4. Will this strategy work in today’s market?
Yes. Qi Value performed well across different years, not just in one period. It stayed strong even when other ratios lagged. That consistency is key to long-term success.
5. What if a stock looks cheap on Qi Value but keeps falling?
Use momentum filters to avoid value traps. Look at price trends like 6-month or 12-month Price Index. If price is rising, that means the market agrees it is a good deal. This keeps you out of falling knives.
6. Can I combine Qi Value with other strategies I use?
Absolutely. You can add quality filters like Piotroski F-Score or focus only on large-cap stocks with strong cash flow. The screener lets you stack filters to fit your style.
7. I am busy. How much time do I need to use this?
Just 15 to 30 minutes per week. Open the screener, set your filters, and review the top stocks. That is all. No deep research or news scanning needed unless you want to dig deeper. Keep your individual positions small, no more than 1% to 2% of your portfolio to let the strategy work for you without any large company specific risk.
