search

ccpandhare / stock-analyser

0 stars 0 forks source link

Stock analysis checks #5

Open AshutoshSancheti opened 2 years ago

AshutoshSancheti commented 2 years ago

These are the possible checks that we can use to filter/analyze stocks:

  1. If the RoA is increasing while the Dividend payout is under 20%, then the company is improving asset utilization -> come up with equation where for given year dividend payout if not given then what is the RoA and then see if it is better than last year's actual RoA
  2. Joel greenbalt's rule on earning yield and RoCE (higher earnings yield and higher RoCE is better). Can this be reduced to a single parameter -> something like an F-score?
  3. NPV and SSGR can be used to assess margin of safety
  4. Rising OPM & EBIT margins
  5. Match rise in reserves against profits to see if equity dilution has happen
ccpandhare commented 2 years ago

This looks really good @AshutoshSancheti!

Re (2) - > What do you think about E.Y. (%) * RoCE (%) ?

Let's also use cash flow. How about increasing FCFE over a 5 year period?

AshutoshSancheti commented 2 years ago
  1. I was thinking about using something similar to F-score that is used in Machine learning. (E.Y.*RoCE)/(E.Y. + RoCE).
  2. The problem with FCF is that it should be seen in terms of capex and expansion plans.
AshutoshSancheti commented 2 years ago
  1. The companies with best performing stock have the following characteristics: growth (profit & sales), efficiency( lesser resources per unit sale, the OPM/EBIT must grow faster than sales. Search for companies where margin is expanding or stable)
  2. Matching CFO against (OP - Tax & interest) should be checked over a 5 year period
  3. High dividend payout ratio can indicate that the company doesn't have growth avenues for its capital
ccpandhare commented 2 years ago

Okay - let's collaborate over the weekend and program an initial version