Come whatever event (health crisis, economic bubbles, economic recessions, political events, etc.), there should not be any doubt on business survival.
Earlier it used to be only food companies into this category, but now there are many.
Thread - How to spot a potential multibagger
Multiple fundamental parameters however we cannot be rigid on any of these parameters.
Be flexible to interpret things from bigger picture point of view.
Come whatever event (health crisis, economic bubbles, economic recessions, political events, etc.), there should not be any doubt on business survival.
Earlier it used to be only food companies into this category, but now there are many.
At any point of time, we can think with a certain common sense approach that if management wants, there can be a sustainable growth at any point of time.
Obviously this growth may come thru innovation, optimization, etc.
Management should be forward looking, should be able to read into future to build right growth avenues, should be considerate towards every stakeholder.
In addition management should be ethical & should have good social image too.
There should be a reasonable skin in the game from promoter.
If in case there is a low promoter stake, then promoter should increase stake at every possible opportunity.
Also pledging should either be zero or minimal.
Debt is becoming a dirtier word at individual as well as at corporate level.
Lower the debt, better the valuations.
At the most fundamental level, a company's ability to create value for shareholders is determined by its ability to generate positive cash flows, or more specifically, maximize long-term free cash flow (FCF)
Lesser the equity dilution, better will be the valuations.
Management should avoid the equity dilution at all times. To improve the liquidity, equity dilution is good sometimes however it should be only when the proportionate growth is visible.
If company is showing earnings of 100 & giving dividend equivalent of just 10 or less, raise more doubts on such companies before building conviction.
It has been a great learning experience based on this parameter.
Thr shd be good dividend policy
More from LearnLifeWealthTravel | Dream Big, Think Growth !!
You May Also Like
I'm going to do two history threads on Ethiopia, one on its ancient history, one on its modern story (1800 to today). 🇪🇹
I'll begin with the ancient history ... and it goes way back. Because modern humans - and before that, the ancestors of humans - almost certainly originated in Ethiopia. 🇪🇹 (sub-thread):
The first likely historical reference to Ethiopia is ancient Egyptian records of trade expeditions to the "Land of Punt" in search of gold, ebony, ivory, incense, and wild animals, starting in c 2500 BC 🇪🇹
Ethiopians themselves believe that the Queen of Sheba, who visited Israel's King Solomon in the Bible (c 950 BC), came from Ethiopia (not Yemen, as others believe). Here she is meeting Solomon in a stain-glassed window in Addis Ababa's Holy Trinity Church. 🇪🇹
References to the Queen of Sheba are everywhere in Ethiopia. The national airline's frequent flier miles are even called "ShebaMiles". 🇪🇹
I'll begin with the ancient history ... and it goes way back. Because modern humans - and before that, the ancestors of humans - almost certainly originated in Ethiopia. 🇪🇹 (sub-thread):
The famous \u201cLucy\u201d, an early ancestor of modern humans (Australopithecus) that lived 3.2 million years ago, and was discovered in 1974 in Ethiopia, displayed in the national museum in Addis Ababa \U0001f1ea\U0001f1f9 pic.twitter.com/N3oWqk1SW2
— Patrick Chovanec (@prchovanec) November 9, 2018
The first likely historical reference to Ethiopia is ancient Egyptian records of trade expeditions to the "Land of Punt" in search of gold, ebony, ivory, incense, and wild animals, starting in c 2500 BC 🇪🇹
Ethiopians themselves believe that the Queen of Sheba, who visited Israel's King Solomon in the Bible (c 950 BC), came from Ethiopia (not Yemen, as others believe). Here she is meeting Solomon in a stain-glassed window in Addis Ababa's Holy Trinity Church. 🇪🇹
References to the Queen of Sheba are everywhere in Ethiopia. The national airline's frequent flier miles are even called "ShebaMiles". 🇪🇹