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 that 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 that 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 that translate most earnings into free cash flow.
Companies that translate most earnings into FCF massively outperform companies that don't.
Invest in companies that translate most earnings into free cash flow.
Companies that translate most earnings into FCF massively outperform companies that don't.
4️⃣ ROIC > 15%
ROIC = NOPAT / Invested Capital
Return On Invested Capital is the best way to measure how efficiently management is allocallocatesating capital.
ROIC = NOPAT / Invested Capital
Return On Invested Capital is the best way to measure how efficiently management is allocallocatesating capital.
5️⃣ Net debt / FCFF < 5
You want to invest in companies that 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 that 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 whithatch 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 whithatch are in good financial shape.
A company should be able to pay down its debt in at least 5 years.
That's it for today.
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Grab this free e-book full of interesting examples that match these criteria: compounding-quality.ck.page
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