Focus on what the filings say

Breakout traders mostly ignore fundamentals. The chart is the signal, the stop is the risk, and whatever the company reported last quarter is somebody else's problem.

That is a reasonable default. But every breakout lands on a real company with a real balance sheet and a real price tag. Peter Lynch spent his career on one question about that price tag: are you paying a fair price for the growth you're getting?

We scored every breakout with Lynch's own checks, using only the filings that existed before the trade. Here is what showed up in the data.

The setup

Same momentum breakout trades as our other backtests: 1,837 trades from 2008 to 2026. Profit is measured in R, where 1R is the amount risked on a trade. The book averages about +0.44R per trade with a 24% win rate.

Portfolio rules for every equity curve: $10,000 start in January 2008, compounding, risk as a % of closed-trade equity at entry, and at most 10 open positions. When all slots are full, the new signal is dropped.

Every number had to be knowable the day before entry. Revenue, earnings, cash flow, debt and share counts come from SEC XBRL filings dated before the trade; later restatements are excluded. Market cap uses the unadjusted prior close. No AI is involved: the whole score is arithmetic on SEC filings and prices.

Lynch's ratios, one at a time