STOCK SELECTION CRITERIA

 

  • EPS Growth 3 Years > 5%: This criterion ensures that the company has achieved consistent earnings growth over the past three years, indicating strong performance and potential for future growth.

  • Average Return on Equity 5 Years > 10: A high ROE over the past five years demonstrates the company's ability to generate profit from shareholders' equity, reflecting efficient management and profitability.

  • Return on Invested Capital > 10: ROIC measures how well a company generates returns from its capital investments, ensuring that the company is efficiently using its capital to generate profits.

  • Return on Assets 5 Years > 10: A high ROA over the past five years indicates that the company is effective in using its assets to generate earnings, showcasing operational efficiency.

  • Earnings Yield > 10: This criterion assesses the earnings generated by each dollar invested in the company, providing a measure of profitability and valuation attractiveness.

  • Price to Earning < 10: A lower P/E ratio indicates that the stock is undervalued relative to its earnings, making it potentially attractive to value investors.

  • Price to Book Value < 5: This ratio compares the market value of the stock to its book value, ensuring that the stock is not excessively overvalued compared to its actual assets.

  • EV/EBITDA > 5: This ratio measures the company's enterprise value relative to its earnings before interest, taxes, depreciation, and amortization, ensuring that the company is not undervalued relative to its earnings.

  • Debt to Equity < 5: A lower debt-to-equity ratio indicates that the company has a manageable level of debt compared to its equity, reducing financial risk.

  • Piotroski Score > 6: The Piotroski Score is a measure of a company's financial health, with a score above 6 indicating a strong financial position and potential for growth.

  • Book Value Preceding Year > 100: Ensuring the company has a substantial book value from the previous year, indicating a solid asset base and financial stability.

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