DrVijayMalik_ValueGuru_Checklist
Ist Upd - 05Jul2020

#Thread

A small tribute to @drvijaymalik on the occasion of Guru Purnima🙏

#valueinvesting #stocks
#SalesGrowth #OPM #npm
#CurrentRatio #DebtToEquity
#SSGR #MarginOfSafety #MaxPEtoPay #EarningsYield
#FII
#MaithanAlloy

1n

@drvijaymalik The Final Checklist for Buying Stocks !

Financial Checklist !

Taking Maithan Alloys as Sample Stock !

Tax Payout Shown in 1n (above).

2n
Valuation Checklist !

Earnings Yield > 10Yr G-Sec Yield. Higher the difference better it is.

Max PE to Pay calculated on the basis of Prevailing Current Interest Rate in the Economy (10Yr G-Sec Yield)

3n
Business & Industry Checklist !

10yr Cumulative PAT vs CFO. Ideally both should be similar or CFO may be little higher (Maithan Alloy Example)

Creation of Value for shareholders -
10Yr Increase in Market Cap > 10yr Increase in Retained Earnings (Maithan Alloy Example)

4n
Management Checklist & Other Business Parameters !

Most of this needs to be done manually. Take it as homework🙂

Maithan Alloy FII (1.87%) & Promoter Shareholding(74.99%).

Less FII better it is.

Check Change in Promoter Holding in last 3yrs (insider Buying) in 1n (above)

5n
Margin of Safety !

EY Vs 10yr G-Sec

SSGR > Current & Over a Period Sales Growth. Higher SSGR better it is.

Maithan Alloy SSGR Calculation @drvijaymalik

FCF vs CFO ratio over 7 to 10yrs. Higher the ratio better it is.

MaxPEtoPay - 3n (above)

6n
Please refer below thread from Dr Vijay Malik for details -

https://t.co/P5uR2wc6vD

7n
Missed to post one point in Financial Checklist (2n) above.

If CFO meets outflows of CFI & CFF it would be great.

For Maithan Alloys in FY 2019 CFO is 15 Cr short of meeting the outflow of CFI & CFF.

8n
Credit Rating Checklist !

Credit rating should be min BBB- . It should be improving over the years.

Maithan Alloys is a Net Cash Company667 Cr in Mar 2019

Credit Rating: CARE AA CRISIL AA CARE/CRISIL A1+

9n

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The benign product is sovereign programmable money, which is historically a niche interest of folks with a relatively clustered set of beliefs about the state, the literary merit of Snow Crash, and the utility of gold to the modern economy.

This product has narrow appeal and, accordingly, is worth about as much as everything else on a 486 sitting in someone's basement is worth.

The other product is investment scams, which have approximately the best product market fit of anything produced by humans. In no age, in no country, in no city, at no level of sophistication do people consistently say "Actually I would prefer not to get money for nothing."

This product needs the exchanges like they need oxygen, because the value of it is directly tied to having payment rails to move real currency into the ecosystem and some jurisdictional and regulatory legerdemain to stay one step ahead of the banhammer.