Showing posts with label Value investing. Show all posts
Showing posts with label Value investing. Show all posts

Saturday, May 2, 2009

Value investing checklist

In simple terms 'Value Investing' means buying a stock, or indeed a business, at less than its intrinsic value.

The parameters that I have chosen include:
1. ROE and / or ROC of more than 15%
2. PE ratio less than 13%
3. Dividend yield more than 3%
4. Debt to Equity ratio of less than 1 (this parameter is not applicable for banking / financial companies)
5. Price to Book Value ratio of less than 3.5
6. Historical Growth in EPS (over last 10 years) > 7%
7. Net Margin ratio greater than 1.2 times of industry average

- Warren Buffett Watch