Deep Value Without a Screen: Halal Ninja's Hunt for 100 Percent Returns and the Seven Gates It Never Built: A Sharia Analysis for Muslim Investors (2026)

Verdict: Deep value investing is permissible in principle. Buying a productive business for less than it is worth is weighing, not wagering, and nothing in fiqh objects to the weighing. What Halal Ninja's February 2021 article teaches, however, is deep value with the value discipline removed. It sets an ambition of 50 to 100 percent a year, sources ideas from insider filings and other funds' portfolios, keeps its actual metrics unnamed inside a Google Sheets dashboard, and applies exactly one Sharia filter, dropping the financial sector. Five and a half years of evidence have now graded the method. The example list its own funnel produced carried Icahn Enterprises, down roughly 87 percent since a short seller's report two years later, Herbalife, worth about a quarter of its start of 2021 value, and Altria, a tobacco company no Islamic screening methodology would pass. This article states the screen the method needed: seven quantitative gates, each with a published number, each built to refuse a specific way of losing money.

The article is dated February 9, 2021, days after the GameStop mania peaked and Keith Gill, the YouTube value investor known as Roaring Kitty, became briefly the most famous stock picker alive. Halal Ninja is candid about the inspiration and about the goal: "I want 50% - 100%/yr returns, so even a relatively small amount of money invested could start to compound". The article is equally candid about its foundations: "I still have no idea if this will work out, but I have to try". That honesty deserves respect, and this series has given the same author real credit where his DCF tutorials earned it. But candour about uncertainty is not a substitute for a method, and the distance between hoping and screening turns out to be exactly seven numbers wide.

Strip the article to its mechanics and it has two idea channels and one filter.

The first channel is insider buying. The article looks for "multiple insiders buying (these are known as 'cluster buys'). Extra points for those with substantial amounts ($100k+)". This is a real signal with a real academic literature behind it, and the thresholds are sensible as far as they go.

The second channel is fund tracking. When a fund buys more than 5 percent of a company it must file a Form 13-D, and funds above $100 million in assets must disclose their holdings each quarter through a 13-F filing, within 45 days of quarter end. The article tracks Michael Burry's Scion Asset Management and takes its wider watch list from its hero: "Roaring Kitty helpfully shares a list, that I use as a starting point". The instruction for using these filings is to "note down the top holdings" and to "put more emphasis on positions that the fund entered or added to".

The filter is a single sentence: "I just make sure to filter out Financials right off the bat, since I know that these are almost universally haram".

And the screen, the part that decides which of these leads deserves money? It lives in "a dashboard in Google Sheets that allowed me to instantly pull in the metrics I'd need". Which metrics, with which thresholds, the article never says. Its own conclusion notices the consequence: "Already, I started to notice a problem. There are so many leads to analyze!" The funnel has a wide mouth and no throat.

The article helpfully shows the fund-holdings list its method produced in February 2021: Uniti, Pfizer, Western Digital, Icahn Enterprises, Xerox, Herbalife, Dana, Qualcomm, McKesson, Seagate, Altria, LyondellBasell, Kroger, AbbVie and T-Mobile. These are illustrations of the sourcing method, not formal recommendations, and fairness requires saying so. But a funnel is judged by what it pours out, so look at three of those names.

Icahn Enterprises was still trading around $50 a unit at the start of May 2023. On 2 May, Hindenburg Research published a report accusing it of overvaluing its holdings and of a "Ponzi-like" distribution structure, claims the partnership publicly rejected. The units fell about a fifth in days. In August 2023 the quarterly distribution was halved and the units fell another 23 percent in a single session. On 20 August 2026 they closed at $6.65, roughly 87 percent below where they stood when the report landed. Note the irony: Icahn Enterprises is a holding partnership built around an investment segment, arguably the closest thing on the whole list to the "Financials" the method's one filter existed to remove. The filter did not catch it.

Herbalife tells the same story without a villain. Chain its yearly returns from the price history: minus 18 percent in 2021, minus 65 percent in 2022, plus 2 percent in 2023, minus 56 percent in 2024, plus 93 percent in 2025, slightly down in 2026. A dollar left in the stock at the start of 2021 was worth about 24 cents on 20 August 2026, and that is after the 2025 rebound.

Altria fails a different test entirely. It is a tobacco company, and tobacco sits by name on the prohibited activity lists of the Islamic index methodologies; MSCI's, for one, bars "cigarettes and other tobacco products manufacturers and retailers" before any ratio is computed. A halal investing article whose single Sharia control is "filter out Financials" hands its reader a tobacco firm in its own illustration, which tells you what a one-sector filter is worth.

The same list also held names that went on to do well. That is precisely the indictment. A funnel that delivers Qualcomm and Icahn Enterprises with equal confidence is not analysis; it is a lottery drum, and the drawing has been outsourced to whoever filed a 13-F six weeks ago, since the filing you copy is already up to 45 days stale on the day you read it.

Here is what stands between a lead and money on this site. Every gate is a number. Every number is published. A company must pass all seven before it earns an hour of reading, and each gate exists because one of the failure modes above walked through the hole where it should have stood.

Correction, August 2026. The accrual row above is stated backwards, and the row is left standing so the correction can be checked against it. An accrual ratio is a low is better measure, not a band with a floor and a ceiling: Sloan's 1996 paper goes long the lowest accrual decile and short the highest. The gate should read net income minus operating cash flow minus investing cash flow, divided by average total assets, passing at or below 10 percent, with negative better than positive. The next article in this series sets out the correction in full and reruns the whole screen on it.

Three of these deserve a word, because their absence from a deep value tutorial is remarkable.

The Piotroski F-Score was built for exactly the pond deep value fishes in. Joseph Piotroski's 2000 study took the cheapest stocks by book value, the classic deep value universe, scored them on nine simple accounting signals, and showed that demanding financial strength lifted the return of that cheap portfolio by at least 7.5 percent a year, with a long winners, short losers version earning 23 percent annually from 1976 to 1996. A deep value article that never mentions the one academic instrument designed for deep value is teaching fishing without the net.

The Altman Z-score answers the question every cheap stock poses: is it cheap, or is it dying? Edward Altman's 1968 discriminant model separates the safe zone, above 2.99, from the distress zone below 1.81. Deep value pools are where bankruptcies live, which is why the solvency gate comes first and why its threshold is the top of Altman's safe zone, not the bottom.

The momentum band is the gate value investors resist, and the one that guards them from themselves. Jegadeesh and Titman showed in 1993 that returns persist over three to twelve month horizons. Requiring the trailing twelve months, measured to the end of last month, to sit between 10 and 100 percent does two jobs at once: the floor keeps you out of knives still falling, the Herbalifes, and the cap keeps you out of parabolic stories, which means the very GameStop that inspired the article could never have entered the book. A stock that has multiplied several times in a year fails the gate by construction. Nor is the floor hindsight: Herbalife's calendar 2020 return was 1.8 percent, under the 10 percent minimum, so this gate stood ready to refuse it in the very month the article listed it.

The remaining gates each close a named hole. The earnings yield, operating profit over enterprise value, is Joel Greenblatt's cheapness measure, and it is the astonishing omission: a deep value method with no valuation ratio at all has no definition of value. The cash flow accrual gate demands that reported profit be backed by operating cash rather than assembled from accruals, because Richard Sloan showed in 1996 that earnings built from accruals rather than cash reliably disappoint; the threshold this gate should carry is in the correction above, not in the row it corrects. The debt gate is where fiqh and finance shake hands, and it gets its own section.

"Filter out Financials" is a fine first cut, and the article is right that conventional banks and insurers fail any Islamic screen. But riba does not live only in the financial sector. It lives on the balance sheet of every levered industrial, in the interest income line of every corporate treasury, and in the conventional financing arms of car makers and retailers his filter waves through.

AAOIFI Shari'ah Standard No. 21, Financial Paper (Shares and Bonds) (issued 2004; English edition 2015) screens every company, whatever its sector: interest-bearing debt must stay under 30 percent of market capitalisation, cash and interest-bearing securities under 30 percent, and impermissible income under 5 percent of revenue, purified where it exists. The seven-gate screen's debt rule, 0 to 30 percent of total assets, chooses the divisor that does not reprice with the crowd's mood, because a market capitalisation basis swells in a bull market and flatters exactly the leverage it is meant to expose. The choice is not uniformly stricter: for a deep value stock priced below book, the depressed market value makes AAOIFI's ratio the harder test, a trade-off mapped in the Where Scholars Differ section below. You can check any listed company against the AAOIFI ratios on the stock screener, which is what a Sharia filter looks like when it is a screen rather than a sentence. The foundations of why riba is excluded at all are in our halal and haram guide.

Gharar in this method operates at two layers. A note of candour first, matching the one the maysir section makes below: classical gharar attaches to a contract and its object, not to a buyer's private process, and deception in accounts is as much tadlis, the seller's concealment of a defect, as it is uncertainty. The extension to an investor's own method is this article's reasoning, stated so the reader can weigh it.

The first is the gharar of the process. A method whose metrics are never stated cannot be audited, cannot be falsified, and cannot be distinguished from luck, even by its own author. "The metrics I'd need" is not a screen; it is a private feeling with a spreadsheet interface. Every threshold in the table above is public precisely so that a reader can check the arithmetic and dispute the gates. Uncertainty you cannot examine is the thing fiqh keeps telling you not to buy.

The second is the gharar of the object. When management manipulates earnings, the company you think you are buying is not the company you receive. Allah says in Surah Al-Mutaffifin, verses 1 to 3:

وَيۡلٞ لِّلۡمُطَفِّفِينَ ٱلَّذِينَ إِذَا ٱكۡتَالُواْ عَلَى ٱلنَّاسِ يَسۡتَوۡفُونَ وَإِذَا كَالُوهُمۡ أَو وَّزَنُوهُمۡ يُخۡسِرُونَ

"Woe to those who give less [than due], Who, when they take a measure from people, take in full. But if they give by measure or by weight to them, they cause loss." (Saheeh International)

Earnings manipulation is short measure in corporate form: management takes the investor's capital in full and returns accounts that deliver less than they claim. The Beneish M-score exists to detect it before you pay. Messod Beneish built the model in 1999 from 74 known manipulators; below -2.22 is clean, the band up to -1.78 is a grey zone that demands investigation, and above -1.78 the base rates say walk away. Deep value pools attract manipulators for a structural reason: a stock is often cheap because the numbers are the best thing about it. A deep value method with no manipulation gate is a customer the mutaffifin are waiting for, and a copied 13-F is no protection, as anyone who followed conviction into Icahn Enterprises ahead of May 2023 discovered.

None of the scholars this site cites has ruled on return targets or on momentum bands, so this section applies principles on its own account, and says so plainly.

Wanting high returns is not maysir. Setting a target of 50 to 100 percent a year with no stated method, on the strength of a discovery the article itself describes as "mesmerizing", is how an investment programme drifts into a wager: the number does not come from any process, so the process must become whatever chases the number. The article's most honest sentence, "I still have no idea if this will work out, but I have to try", is also its most alarming, because "I have to try" is the gambler's sentence whenever no gate stands between the feeling and the trade.

The discipline that prevents the drift is the same one our present value analysis demanded of a DCF output: a rule stated before the ticker is seen, and obedience to your own rule afterwards. Seven gates are exactly that. Note that the momentum band, the gate that looks most like chart-chasing, is its opposite: it is a measured factor with a floor, a cap, and a refusal built in. Chasing is buying because the line went up. The band frequently refuses precisely the stocks whose lines went up most.

Credit where it is owed. Insider cluster buying is a genuine, filings-based signal, and the article's $100k and multiple-insider thresholds are the sensible way to read it. Teaching retail readers that 13-D and 13-F filings exist, and how to read them, is primary-source education most finance blogs never attempt. Removing financials before screening is correct as far as it goes. And the article's honesty about its own uncertainty is worth more than most newsletters' confidence.

What it leaves out is every number. No solvency floor, no manipulation check, no quality score, no cash-backing test, no momentum band, no valuation ratio, no debt limit. Its idea channels are borrowed conviction, stale by up to 45 days, and its Sharia layer is one sector exclusion on a site named for halal investing: no AAOIFI standard, no purification, no scholar, no activity screen that would have caught the tobacco company sitting in its own example table. The DuPont analysis in this series showed the same pattern in the same author's later work: real mechanics, taught clearly, stopping short exactly where the Muslim investor's obligations begin.

The seven gates are a financial instrument, but their debt rule sits inside a live scholarly divergence about how leverage should be measured. AAOIFI Standard 21 divides interest-bearing debt by market capitalisation, and Zoya, whose screening Sheikh Joe Bradford supervises as Shariah advisor, applies that standard by default. MSCI's Islamic Index methodology, for one, instead divides all three of its ratios by total assets, with a 33.33 percent ceiling. The arguments run both ways: the market capitalisation divisor reflects what the market will actually pay for the equity, while the asset divisor is stable through panics, and a market-based screen can expel a company in a crash at the exact moment its price becomes attractive. Mufti Faraz Adam's Amanah Advisors methodology takes a third road, tracing revenue and funding streams granularly rather than resting on a single ratio. And Mufti Taqi Usmani's Principles of Shariah Governing Islamic Investment Funds reminds every screener what the thresholds are: tolerances extended out of necessity, alongside a duty to disapprove of interest-based borrowing and to purify what it produces, not an endorsement of debt up to a ceiling. The debt gate here, zero to 30 percent of assets, takes the stable divisor with the lower threshold: stricter in a mania, looser for a stock priced below book. That is a choice, not a ruling. The positions are presented; the reader weighs them.

Run the order of operations forward, not backward. First the activity screen: what does the company do, and would AAOIFI's activity exclusions, applied the way our Apple analysis applies them, pass it? Then the seven gates, in any order, with no exceptions granted for a good story. Only then, if you enjoy them, the insider filings and the 13-Fs, demoted to what they honestly are: a source of candidates that still must pass every gate, and a tiebreaker between names that already have. A cluster of insiders buying a company that clears all seven gates is interesting. A cluster of insiders buying a company that fails the Beneish gate is a warning about the insiders.

None of this machinery transfers to digital assets, where there is no EBIT, no accrual line and no balance sheet to score; compliance there is a different question answered by the crypto screener. The valuation step that comes after screening, and the fiqh of the discounting it relies on, is the subject this series' DCF instalments already covered in full.

The difference between the two methods is not ambition, and it is not effort. It is falsifiability. Halal Ninja's article wants 50 to 100 percent a year, names no metric, copies its watch list from a man made famous by a mania, filters one sector, and admits it has no idea whether any of it works. Five years later its own example table reads like a syllabus of the failure modes: the levered holding company that collapsed, the serial decliner that halved and halved again, the tobacco firm no screen should have shown a Muslim reader. Seven gates would have stood in the way: solvency, honest accounts, limited debt, fundamental strength, cash-backed earnings, a momentum band, and a price that pays you. Each is a number. Each was published decades ago. A screen is a promise you make before you see the ticker, and the whole discipline of halal investing, from the AAOIFI ratios to purification, is built on exactly that kind of promise. Hope is not a process. Seven numbers are.

This analysis is educational and is not a fatwa, a price target, or financial advice. Screening thresholds are the author's stated criteria applied to published research; figures change with each reporting period, and readers should verify before acting and consult a qualified scholar where their circumstances require it.

Is deep value investing halal? In principle, yes. Buying underpriced productive businesses is permissible trade, provided each company passes an activity screen and the AAOIFI financial ratios, and provided impermissible income is purified. The method must be screened as carefully as the stocks.

What is wrong with copying 13-F filings? A 13-F can be filed up to 45 days after quarter end, so the position may already be sold, and you inherit the conviction without the reasoning. Anyone copying admired funds into Icahn Enterprises before May 2023 rode it down roughly 87 percent. Filings are a source of candidates, never a screen.

Is insider buying a reliable signal? It is a genuine signal with academic support, and cluster buys of meaningful size are the strongest form. But it is a lead, not a verdict: insiders are optimists about their own firms, and their purchases say nothing about solvency, accounting quality or price. Gates first, insiders after.

What do the Altman Z-score thresholds mean? Altman's 1968 model scores solvency: above 2.99 is the safe zone, below 1.81 is the distress zone where bankruptcies cluster. The screen demands 2.99 or higher because cheap pools are where dying companies hide among bargains.

How do I read the Beneish M-score? Below -2.22, for example -3 or -5, the accounts show no manipulation signal. Between -2.22 and -1.78 is a grey zone that demands investigation. Above -1.78, for example -1 or 0, the base rates from Beneish's 1999 study say treat the company as a manipulator and walk away.

Why does a value screen need momentum? Because cheapness alone cannot tell a bargain from a falling knife. Jegadeesh and Titman documented that returns persist over three to twelve months, so requiring 10 to 100 percent trailing momentum keeps you out of stocks still collapsing, while the cap excludes parabolic manias like the one that inspired the original article.

Did Halal Ninja's deep value method fail? By its own admission it was never tested: "I still have no idea if this will work out". That is the deepest criticism. A method with no stated metrics cannot be tested at all, only survived, and the five-year record of its example list shows what surviving it could have cost.