@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