I would like to filter out businesses with characteristics of FMCG. I am placing this conversation in forum to get help from boarders to come up with aspects to look into when shortlisting such companies. Such companies create wealth in longer run.
Some points which I can think of are
1). NPM in double digits
2). Brand Strength
3). High ROE,ROCE (more than 20)
4). Negligible Debt
5). Low Asset Turnover
6). Negative working capital (though not mandatory)
To calculate capital intensity, shall I checkSales / Gross block >1.5?
Idea is to shortlist businesses which possess these characteristics but are very attractive as most FMCG and Pharma are at very high valuations.
Page,Castrol, Page, Asian Paints,FDC,Wimplast etc satisfying the above criteria.