Since I was not able to find any good growth stories at decent valuations, I was thinking if there are other strategies to look at. One theme that I read a lot about was Companies paying down their debt. When I analysed it I found some of the prominent investors make lot of investments on this theme. So I tried to screen these stocks for further study.
Market Capitalization >=100
and Debt < Debt preceding year
and Interest last year < Interest preceding year
and Net Profit last year >0
and Cash from operations last year >= (0.7* Net Profit last year )
and Other income last year <(0.2* EBIDT last year )
and Interest Coverage >2
and Earnings yield >=8
and Return on invested capital >=20
I get about 28 stocks to read about. Some of the stocks may actually be growth stocks. Prominent investors may have invested in them for Growth reasons than debt pay down. I have not used any growth parameters in the screener.
I have not looked at the liquidity and promoter holding. But since 28 is decent number, we can eliminate some of them by looking at moneycontrol for volumes.
One key observation is many of them seem to be paper companies. Looks like they are suddenly able to pay down debt due to some favourable tailwinds?
I request people to share their valuable commentsDebtPaydown.xls (20 KB)