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Traits of Good Companies
By OT83  •  April 8, 2012
 "Stocks do well or poorly in the future because the businesses behind them do well or poorly - nothing more, and nothing less." [Some famous investor said this phrase, you know who? I hope you know :)]
  • Cheap Valuation - P/B, P/E, discount to NAV etc
  • Business Economic Moats - high barrier to entry, unique product(s) or service(s) such that the company will always be needed and still be around for decades
  • Growth - sustainable consistent growth
  • Profitability -  ROE, ROA, increasing FCF NOT net profit only, net profit margin
  • Financial Health (net cash or little debt, unless company got high earning powers to offset)- see gearing, debt to equity, quick/current ratio, interest coverage ratio
  • Dividend - 2-3% p.a. with <40% dividend payout ratio. History of increasing dividend payout ratio over the years as business grow
  • Risks - think of negative aspects of business
  • Management assessment - compensation(executive ...
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By OT83
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