We going against the market. Buy stock of a good company when the stock price extremely low & attractive
With high level of competence of financial & business competence, to make high level of RETURNS!
High level of Probability of Success.. GREAT COMPANY in BIG DISCOUNT:
- 5 years History of consistently increasing of sales, earnings & cash flow. if this company show increasing of Sales & Earning, especially during recession, high chance it will continue to maintain it's performance. Sales will be the core measure as it cannot be change, but earning can be manipulate. If a company shown a increase of earning but drop in sales, must be careful..For cash flow, operating cash flow is how a company cash flow in operating the company. An increasing means more cash to operate the company.
- Sustainable competitive advantages, such as a strong brand, patents & trade secret, gigantic economies scale, market leadership among competitors and High switching cost.
- Company that have future growth plan in-place, example develop new products line, new application of patent, open new market, building more outlet & expansion of capacity.
- Conservative debts, can be measure by the long term debts is less than 3 times of current net earning/ net income. This is to ensure the company can payback the debt within 3 years.
- Return of Equity(ROE) that above average >15% per year. ROE is calculated base on Net income divide by total share equity.
- Low capital expenditure (CAPEX) is required to maintain current operations. Avoid companies that have high earnings, but majority of portion has to go to maintenance or replacing plant & equipment
- The management is holding or buying the company stock.
- Stock is undervalue, which is at or below intrinsic value.
- Stock price is consolidating or is at up-trend. Compare stock price with volume of trading. Use technical analysis to identify up-trend, down-trend & consolidation. Go in when break out occurred.
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