Investing Basics - Feel free to ask the most basic questions

[dineshssairam]

• I mostly use EV/EBITDA to filter for all companies, because the Ratio covers almost everything that affects the Value of a company (Profits, Debt, Capex, Working Capital). 13-15 would be a good filtering range for EV/EBITDA, but of course it depends on your risk appetite.

• It’s difficult to filter for BFSI firms because things that matter like NIM or Net NPA Percentage are not captured in Screeners usually. You could still try using the P/B Ratio. A range of 3-5 would be acceptable.

• For FMCG firms, you could try filtering using the P/S or P/FCF Ratios, since their P/E Ratios tend to make very little sense.

Maybe this post I made some time back would help you a little (Wrt the Screening process):

Dinesh Sairam's Portfolio: Requesting Feedback

I would update the first post and mention it in a comment once I make a new purchase or modify existing stocks. Regarding Screens, I would rather not point to a specific set of Ratios or a Screen itself, as it would be a really biased opinion. I will give you the general framework of how I go about filtering stocks. Identifying Pricing Power: Pricing Power is often the first frontier to identify a possible Moat. You can either look at consistent or slightly increasing OPM. There is no magic …

But when all is said and done, filtering forms a very small part of my investment research. I’ve found out about many more companies during my interactions with friends, by reading newspapers/magazines or through VP itself than by filtering.