How to find great companies:
✅ Revenue growth > 5%
✅ EPS growth > 7%
✅ FCF / earnings > 80%
✅ ROIC > 15%
✅ Net debt / FCFF < 5
✅ Debt/equity < 80%
I'll teach you how to find Quality Companies here 👇
✅ Revenue growth > 5%
✅ EPS growth > 7%
✅ FCF / earnings > 80%
✅ ROIC > 15%
✅ Net debt / FCFF < 5
✅ Debt/equity < 80%
I'll teach you how to find Quality Companies here 👇
1️⃣ Revenue growth > 5%
Organic growth is the most preferred source of growth.
A company won't be able to grow its earnings forever when it isn't able to grow its top-line.
Organic growth is the most preferred source of growth.
A company won't be able to grow its earnings forever when it isn't able to grow its top-line.
2️⃣ EPS growth > 7%
You want to invest in companies which are able to grow at an attractive rate.
In the long term, EPS growth is the main driver of stock prices.
You want to invest in companies which are able to grow at an attractive rate.
In the long term, EPS growth is the main driver of stock prices.
3️⃣ FCF / Earnings > 80%
Invest in companies which translate most earnings into free cash flow.
Companies who translate most earnings into FCF massively outperform companies which don't.
Invest in companies which translate most earnings into free cash flow.
Companies who translate most earnings into FCF massively outperform companies which don't.
4️⃣ ROIC > 15%
ROIC = NOPAT / Invested Capital
Return On Invested Capital is the best way to measure how efficiently management is allocating capital.
ROIC = NOPAT / Invested Capital
Return On Invested Capital is the best way to measure how efficiently management is allocating capital.
5️⃣ Net debt / FCFF < 5
You want to invest in companies which are in good financial shape.
A company should be able to pay down its debt in at least 5 years.
You want to invest in companies which are in good financial shape.
A company should be able to pay down its debt in at least 5 years.
6️⃣ Net debt / FCFF < 5
You want to invest in companies which are in good financial shape.
A company should be able to pay down its debt in at least 5 years.
You want to invest in companies which are in good financial shape.
A company should be able to pay down its debt in at least 5 years.
You want to know how you can screen for these criteria yourself?
Personally, I use Bloomberg.
But you can also use free stock screeners like @stratosphere_io.
Personally, I use Bloomberg.
But you can also use free stock screeners like @stratosphere_io.
Here are a few companies which match these criteria:
You want more?
I'm sharing a FREE COURSE with more than 50 examples of quality companies.
This list managed to massively outperform the S&P500.
Sign up here:
eepurl.com
I'm sharing a FREE COURSE with more than 50 examples of quality companies.
This list managed to massively outperform the S&P500.
Sign up here:
eepurl.com
Loading suggestions...