Posted by RosmahMansur > 2016-03-08 18:13 | Report Abuse

debt over equity ratio must be less than 50%

Posted by shinado > 2016-03-08 18:21 | Report Abuse

Boss, point no.10 considered cover this part.

Posted by RosmahMansur > Mar 8, 2016 06:13 PM | Report Abuse

debt over equity ratio must be less than 50%

Posted by RosmahMansur > 2016-03-08 18:25 | Report Abuse

What abt Net tangible assets? for me, i prefer a stock trading at a lower price than its NTA.

Posted by Probability > 2016-03-08 18:26 | Report Abuse

Shinado..thanks for your sharing.
Im curious to know more about point no. 6 & 7 especially 7..
what is that...and why does it matter?

6. FCF vs Revenue > 5%.
7. ROAE > 15%.

Posted by shinado > 2016-03-08 18:44 | Report Abuse

I prefer on earnings and cash flow. If you go for NTA, make sure to employ Margin of Safety.

Posted by shinado > 2016-03-08 18:52 | Report Abuse

Probability, FCF means free cash flow. The amount of 'free cash' generated from operations cash flow after minus out capital expenditure. High FCF vs revenue means high free cash generated from sales which is good(usually above 5%).

ROAE is a slight variantion of ROE which is Return of Equity but i calculate based on average equity to offset any spike in equity portion. Usually high ROE is good. But I would say ROIC will be a better indicator for calculating return of capital employed.

Posted by cheated > 2016-03-08 19:17 | Report Abuse

If follow no 3 Pantech is out.

Must-have criterias:
1. Company must be public-listed for at least 5 years (did not realize I left it out in the first time!)
2. Increasing revenue, net profit & owner's earnings for the past 5 years.
3. Consecutive 2 year drop in revenue & net profit is a big no-no for me.
4. Some form of dividends paid each year for the past 5 years.
5. Increasing ROIC & CROIC in the past few years AND/OR high percentage (>10%).
6. FCF vs Revenue > 5%.
7. ROAE > 15%.
8. Good gross, operating, & net profit margins compared to peers.
9. Company must have healthy cash balance, but not too much cash sitting idle.
10. No debt or manageable debt company.
11. NO CHINA COMPANY.
12. Don't invest in sectors that I am not familiar with (e.g. Banking/plantation/airline/financial).
13. Avoid companies whose stocks constantly in the 'Top Active Stock' list (unless you want to try your luck trading against the big fishes).

Posted by stockmanmy > 2016-03-08 19:22 | Report Abuse

I got a better suggestion.....just focus on the opposite....in other words, look for turnarounds, only buy when it is low volume and consolidating at low volumes at a historical low price and awaiting turn around like AA and AAX.

or Bornoil

the charts, the patience and the concept then becomes the key.

Posted by stockmanmy > 2016-03-08 19:27 | Report Abuse

there are lots of companies traded at historical lows now.
Coastal eg.


focus on stuffs other people don't want. but you want.

Posted by Up_down > 2016-03-08 19:31 | Report Abuse

So many criteria ...pening. It's a conservative approach. You can hardly find a company with high growth and low gearing couple with low PER.

Posted by Probability > 2016-03-08 19:47 | Report Abuse

Thanks Shinado :)

Posted by aidwiz > 2016-03-08 19:58 | Report Abuse

any suggestion on any companies that fulfill of the above?

Posted by donfollowblindly > 2016-03-08 20:39 | Report Abuse

Jobstreet not qualify if follow above rule.

Posted by shinado > 2016-03-08 21:59 | Report Abuse

Yes my list is more conservative than what others might have. My next post will identify a stock that fits these criterias.

Posted by cloudtrip > 2016-03-09 15:46 | Report Abuse

nothing to invest with this criterial

Posted by cheated > 2016-03-09 04:31 | Report Abuse

Pintaras, PresBhd out if follow Shinado criterias.

Must-have criterias:
1. Company must be public-listed for at least 5 years (did not realize I left it out in the first time!)
2. Increasing revenue, net profit & owner's earnings for the past 5 years.
3. Consecutive 2 year drop in revenue & net profit is a big no-no for me.

Posted by Frank Soweto > 2016-03-09 04:42 | Report Abuse

maybe another criteria about management especially the boss - CEO must NOT always be in the news - for the wrong reason - like General Lee of KNM n Tey fella of Nexgram or the one tat makan gaji buta like Ayatollah Shah of Scomi or the sleeping beauty Anto ex boss of Mudatidor :)

Posted by Icon8888 > 2016-03-09 07:28 | Report Abuse

Too many conditions

In real life, you can't pick stocks like that

There is nothing left to be picked as many will be excluded

Sorry shinado, my honest opinion

Posted by Icon8888 > 2016-03-21 16:53 | Report Abuse

If there is a Dislike Button, I will press it

Posted by Icon8888 > 2016-03-09 07:25 | Report Abuse

Item 2 alone will guarantee you the stock is trading at high PE multiple

You will end up buying blue chips

Posted by Icon8888 > 2016-03-09 07:35 | Report Abuse

U will totally miss out last year export run

None have growing profit in past five years

And u can't buy hevea, it has high gearing (right before boom). It's warrants went up 500%. Your stock sift will have eliminated it in round one

Posted by shinado > 2016-03-26 14:48 | Report Abuse

Thank you all for the honest feedback. Hopefully, today I can write a post about identifying a stock with these criterias.

Posted by kcchongnz > 2016-03-09 11:05 | Report Abuse

shinado,

It is better to be safe than sorry.

Your criteria are stringent no doubt. But if you can find a few to invest in, you can sleep soundly.

I believe you can find many during market down turn, especially when there are a lot of margin calls. Margin calls appear to be very common nowadays. It is certainly good for those looking for bargain like you do.

Posted by shinado > 2016-03-09 11:44 | Report Abuse

KC, no doubt I can sleep soundly each night whether market rally or crash. My selection criteria enable me to throw out the weak ones and list down the remaining strong ones.

However, valuation wise might be tough. Not all can be bought at this moment. I'm sure most can be bought during market downturn just like you said.

Am I too stringent? Perhaps time will tell.