Tag Archives: criteria

Stock Screen for Predictable Growth & Low Debt

Stock Screen for Predictable Growth & Low DebtIn the previous article we developed a value investing stock selection criteria based on companies that exhibit predictable growth in earnings, sales, and equity, and have low or no debt. This is called the PGLD criteria and we will now use a stock screener to see what stocks are able to meet it.

We will use the Finviz stock screener for this exercise, as it’s free and offers the ability to screen against virtually any fundamental, technical, or descriptive criteria possible. The only exception is BVPS growth which we will have to handle manually or with another tool. Continue reading

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Stock Selection Criteria: Predictable Growth & Low Debt

Question mark in spray paint

Defining a suitable stock selection criteria is step #1 in our value investing workflow. It’s critical that we select only those stocks that will allow us to calculate a valuation with an accuracy we’re sufficiently confident in to enable proper execution of our value investment strategy.

Selected stocks firstly must be highly predictable. A highly predictable company will allow us to determine an intrinsic value with a high degree of confidence.

Secondly, we are looking for high quality stocks. Quality ties in closely with predictability and is defined by the company’s ability to meet a number of criteria with respect to consistent growth and return on capital. This stock selection criteria will seek to choose only the highest quality companies with a stellar record of consistently high growth across a number of metrics.

Finally, we will seek to limit our selection only to those sectors and industries within which we have at least a cursory understanding of the business. This will allow us to further screen our stock selection against possible red flags or opportunities that may not be present in the numbers themselves. Continue reading

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