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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I’m torn on how to approach the idea of luck. I’m the first to admit that I am one of the luckiest people on the planet. To be born into a prosperous American family in 1960 with smart parents is to start life on third base. The odds against my very existence are astronomical.


I’ve always felt that the luckiest people I know had a talent for recognizing circumstances, not of their own making, that were conducive to a favorable outcome and their ability to quickly take advantage of them.

In other words, dumb luck was just that, it required no awareness on the person’s part, whereas “smart” luck involved awareness followed by action before the circumstances changed.

So, was I “lucky” to be born when I was—nothing I had any control over—and that I came of age just as huge databases and computers were advancing to the point where I could use those tools to write “What Works on Wall Street?” Absolutely.

Was I lucky to start my stock market investments near the peak of interest rates which allowed me to spend the majority of my adult life in a falling rate environment? Yup.