Criteria | Metric | Recommended Value |
---|---|---|
Business Growth | Earnings Growth Rate | 20% or higher annually |
Valuation | Price-to-Earnings (P/E) Ratio | Generally below 20 |
Debt Levels | Debt-to-Equity Ratio | Below 1.0 |
Dividend Policy | Dividend Yield | 1% or higher (preferably increasing) |
Cash Flow | Free Cash Flow | Positive and consistent |
Market Position | Market Capitalization | Focus on mid-cap stocks ($2B - $10B) |
PEG Ratio | Price/Earnings to Growth (PEG) | Below 1.0 |
Understandability | Business Simplicity | Simple and easy to understand |
Insider Ownership | Insider Buying | Significant insider ownership |
Criteria | Metric | Recommended Value |
---|---|---|
Business Quality | Economic Moat | Strong and sustainable |
Revenue Growth | Revenue Growth Rate | 10% or higher annually |
Profitability | Return on Equity (ROE) | 15% or higher |
Valuation | Price-to-Earnings (P/E) Ratio | Below 20 or at least less than industry average |
Debt Levels | Debt-to-Equity Ratio | Below 0.5 |
Dividend Policy | Dividend Yield | 2% or higher (with a history of increases) |
Cash Flow | Free Cash Flow | Positive and growing |
Management Quality | Management Track Record | Proven and trustworthy |
Market Position | Market Share | Leading in their industry |
Criteria | Metric | Recommended Value |
---|---|---|
Business Quality | Economic Moat | Strong and durable |
Profitability | Return on Equity (ROE) | 15% or higher |
Valuation | Price-to-Earnings (P/E) Ratio | Generally below 20 |
Debt Levels | Debt-to-Equity Ratio | Below 0.5 |
Cash Flow | Free Cash Flow | Consistently positive and growing |
Growth Potential | Earnings Growth Rate | 10% or higher over the long term |
Management Quality | Management Track Record | Highly reputable and capable |
Market Position | Competitive Advantage | Clear and sustainable |
Price-to-Book Ratio | Price-to-Book Ratio | Below 1.5 |
Criteria | Metric | Recommended Value |
---|---|---|
Business Quality | Competitive Advantage | Strong and sustainable |
Valuation | Price-to-Earnings (P/E) Ratio | Below 15 or lower than industry average |
Price-to-Book (P/B) Ratio | Price-to-Book Ratio | Below 1.0 |
Earnings Growth | Earnings Growth Rate | Consistent double-digit growth |
Debt Levels | Debt-to-Equity Ratio | Below 1.0 or manageable |
Cash Flow | Free Cash Flow | Positive and growing |
Dividend Policy | Dividend Yield | Preferably above 2% |
Management Quality | Management Track Record | Proven track record and integrity |
Margin of Safety | Intrinsic Value | At least 30% below intrinsic value |
Criteria | Metric | Recommended Value |
---|---|---|
Valuation | Price-to-Earnings (P/E) Ratio | Below 15 |
Margin of Safety | Intrinsic Value | At least 30% below intrinsic value |
Asset Value | Price-to-Book (P/B) Ratio | Below 1.0 |
Earnings Stability | Earnings Per Share (EPS) Growth | Consistent over the past 5-10 years |
Dividend Policy | Dividend Yield | 2% or higher (with a history of payments) |
Debt Levels | Debt-to-Equity Ratio | Below 1.0 |
Current Ratio | Current Ratio | Above 1.5 |
Net Current Assets | Net Current Assets per Share | Positive |
Investment Diversification | Diversification Strategy | Diversified portfolio across sectors |
Criteria | Metric | Recommended Value |
---|---|---|
Economic Moat | Competitive Advantage | Strong and sustainable |
Valuation | Price-to-Earnings (P/E) Ratio | Generally below 15-20 |
Diversification | Asset Allocation | Broad diversification across asset classes |
Debt Levels | Debt-to-Equity Ratio | Below 1.0 or manageable |
Growth Potential | Earnings Growth Rate | 10% or higher over the next few years |
Market Trends | Economic Indicators | Favorable macroeconomic conditions |
Risk Assessment | Value-at-Risk (VaR) | Acceptable risk level based on investor’s profile |
Free Cash Flow | Free Cash Flow | Positive and consistently growing |
Management Quality | Management Track Record | Proven experience and good reputation |
Correlation | Asset Correlation | Low correlation with other assets for diversification |