| Wayne, Porfolio Manager - 2010, presented the following important stock picking criteria in Q1 - 2010 |
| |
| Value Investing |
| Consider both High Earning Yield & High Return On Investment. Use Stock Screening options from Yahoo! , Google etc..
After basic screening pick top 100 stocks. Then in a spreadsheet implement these two formulae to sort these stocks in the highest order of satisfaction to both criteria. |
| High Earning Yield | |
| EBIT / (Market CAP + Debt - Cash) |
| High Return On Investment | |
| EBIT / (Current Asset – Current Liability + PP&E) |
| |
| Value Investing - Factor of Safety |
| Besides considering the above mentioned criteria,
you should also condisder the Margin of Safety. Margin of Safety is calculated on the basis that
If a firm gets liquidated now, how much will be your additional return. |
| High Net Current Asset Value Vs Market Cap | |
| (Current Assets + LT Investments – Total Liabilities) / Market Cap |
| |
| Powerpoint Presentation | eXcel Spreadsheet |
| |
| Leave your questions or comments in this BLOG |
