#Screened few businesses trading at single digit MCap/CFO.

DrVijayMalik_ValueGuru_Checklist
Ist Upd - 05Jul2020

#Thread

A small tribute to @drvijaymalik on the occasion of Guru Purnima🙏

#valueinvesting #stocks
#SalesGrowth #OPM #npm
#CurrentRatio #DebtToEquity
#SSGR #MarginOfSafety #MaxPEtoPay #EarningsYield
#FII
#MaithanAlloy

1n

The Final Checklist for Buying Stocks !

Financial Checklist !

Taking Maithan Alloys as Sample Stock !

Tax Payout Shown in 1n (above).

2n

Valuation Checklist !

Earnings Yield > 10Yr G-Sec Yield. Higher the difference better it is.

Max PE to Pay calculated on the basis of Prevailing Current Interest Rate in the Economy (10Yr G-Sec Yield)

3n

Business & Industry Checklist !

10yr Cumulative PAT vs CFO. Ideally both should be similar or CFO may be little higher (Maithan Alloy Example)

Creation of Value for shareholders -
10Yr Increase in Market Cap > 10yr Increase in Retained Earnings (Maithan Alloy Example)

4n

Management Checklist & Other Business Parameters !

Most of this needs to be done manually. Take it as homework🙂

Maithan Alloy FII (1.87%) & Promoter Shareholding(74.99%).

Less FII better it is.

Check Change in Promoter Holding in last 3yrs (insider Buying) in 1n (above)

5n

My SCREENING TECHNIQUE Based #hypothetical #Portfolio
6th Upd - 26Sep2021

📍Purely based on my Financial Data Screening !

NO TIPS!
NO MEDIA!

📌#Screener Names in👇🧵summarizes Fundamental, Momentum, Valuation traits hence saves tons of analysis time.

@Vivek_Investor

1

Stocks & Screening Technique Methodologies !

@Coolfundoo 🌟25 , 22, 20, 19

2

Stocks & Screening Technique Methodologies !

@Coolfundoo 🌟18, 17, 16

3

Stocks & Screening Technique Methodologies !

@Coolfundoo 🌟15, 14

4

Stocks & Screening Technique Methodologies !

@Coolfundoo 🌟 14 (continued), 13, 12

5

Q&A 161

Read this 🧵to understand ROE, PE & relationship between them.👇

PE expansion to bridge the Gap (if any) between ROE & PE.

RT if you find this helpful.

1

ROE is PE's brother from another mother / Half-brother (Sautela Bhai)

@Atulsingh_asan

2

ROE & PE definition continued..

Keep an eye on Equations !

3

Establishing Relationship between ROE (profitability) & PE (valuation).

Replace Market Capitalization with Book value in Earnings Yield (or PE) we get ROE.

4

Understanding ROE & PE deeper with Dupont Analysis.

5

Excellent resource for Individual investors who want to learn about Accounting and Financial Statements.📊

The concepts are really well explained in a simple, understandable manner for beginners.

cc: @dmuthuk @Gautam__Baid

Content available 👇

Some of my fav sections.

1⃣ The Financial

2⃣ Fundamental Accounting

3⃣ Financial Ratio

Thread Threadexplaining #PE Ratio & #PEG Ratio & its use in #FundamentalAnalysis

(Must read for #FA learners)

🙏Like & RT to spread learning with all🙏

Views Welcome👉@dmuthuk @Vivek_Investor @datta_arvind @caniravkaria @FI_InvestIndia

#FundamentalAnalysis #StockMarket

1⃣

Price to Earnings (#PE) ratio, also known as price multiple or earnings multiple is the ratio obtained by dividing the current share price by earnings per share (#EPS).

#StockMarket #Investing #FundamentalAnalysis

2⃣

P/E ratio is a reflection of the market's opinion of the earnings capacity & future business prospects of a company.

Companies which enjoy high investor confidence & have a higher market standing usually command high P/E ratio.

#StockMarket #Investing #FundamentalAnalysis

3⃣

On the face, it would seem that companies with low P/E ratios would offer most attractive investment opportunities. This is not always true.

Companies with high current earnings but dim future prospects often have low P/E ratio.

#StockMarket #Investing #FundamentalAnalysis

4⃣

As an #investor your primary concern is with future prospects of a company & not so much with its present performance.

This is why companies with low current earnings but bright future prospects usually command high P/E ratio.

#StockMarket #Investing #FundamentalAnalysis

5 YouTube videos that will make you a better investor:

1/ How to read an income

2/ How to read a balance

3/ How to read a cash flow

4/ How to judge a management

Accounting is the language of business.

If you buy stocks, you MUST learn how to read a Cash Flow Statement.

Here’s everything you need to know:

The cash flow statement shows how cash moves in and out of a company over a period of time.

The most common time periods are:
▪️1 Quarter
▪️1 Year
▪️Year-to-date (usually 6 or 9 months)

The time period is at the top. Here's $NFLX recent cash flow statement time period.

Some companies show the cash flow statement in their earnings press release, but many don’t.

You can find the cash flow statement by looking at:
▪️10-Q (Quarterly Report)
▪️10-K (Annual Report)
▪️Fnancial aggregators such as @theTIKR,
@CMLviz, @themotleyfool, @YahooFinance

There are three main segments to a cash flow statement.

1. Operating Activities
2. Investing Activities
3. Financing Activities

Companies get some leeway with how they breakout each segment, but they all follow this basic structure.

Let’s start with Operating Activities.

This segment STARTS with net income (the bottom number of the Income Statement).

It shows cash movements from all normal operational business activities.

One of the best debates I have seen in recent history between @SunilBSinghania and Saurabh Mukherjea.

TOPIC: Has P/E lost its relevance?

I resonate more with Sunil’s side. Here’s a thread 🧵 on the main points made by him:

@varinder_bansal @safiranand @myvaluepicks

1/ Importance of PE

PE is not the only factor but an important factor.

Ultimately the growth has to justify how much PE are you paying for the company.

There cannot be an unlimited PE multiple based on some xyz parameters.

2/ Hindsight Bias:

In hindsight we can say that from 2001 to 2021, a company grew at 25 % and we should have given a very high PE to it.

But on the day when you buy, you don’t know that the company is going to grow at 25% for the next 20 years.

3/ Millennial preference:

Things have become more competitive.

New generation don’t really care much about legacy.

Convenience and affordability matters more.

The longevity and sustainability of growth has changed dramatically.

4/ Company that require a big investment - There is opportunity to invest big.

Company 1: Mkt Cap of 50 cr
Company 2: Mkt cap of 1 lakh cr

50c r company can become 3x, 1 lakh cr company cannot become 2x.

On absolute basis you end up making 5 cr vs 5k cr in 1lakh cr company.