Hi All,
I am planning to start investing in stocks and looking for stock selection criteria. I read many books. But couldn’t come to any concrete conclusion on how to identify good company. So I thought of sharing below and get expert feedback from the group.
- Growth rate > 15-20% for last 5-7 years
- Cash flow should be +ve
- PE should be less than 15 - nice to have
- Debt/Equity ratio should be less than 0.3
- Net profit Margin should be >10-15%
- Promoters stakeholding should be >51%
- Prefer dividend paying company
- Company should have competetive advantage
- Industry should be growing e.g. Consumer/Retail, Finance etc are growing
- Stock price should be below intrinsic value - difficult . But there are some companies like Persistent systems which are around their intrinsic value.
Generally I check stock on screener.in,moneyworks4me to see details about above. I tried reading annual report of few companies. But not able to get much out of it. So any suggestion to shortlist a stock is welcome.