Quality is a relative term, the same way that beauty is in the eye of the beholder. In my All-Equities SRG portfolio, I usually look at the resilience of the business model to make a quality assessment. Recurring or predictable revenue streams, cycle-agnostic demand and industry dominance are the three key factors that I pay most attention to.
Direxion defines quality from the perspective of ROE, net operating assets and financial leverage. At least this is the key criteria that the ETF manager uses to select stocks for the Direxion S&P 500 High minus Low