Hope you are doing well.
I have been working on a Stock Selection Framework for myself for sometime now.
It’s supposed to give Shortlists for Multi-Baggers in any geography.
Here is the draft of the Pole Star Stock Selection Model: Stock Analysis - Pole Star Stock Selection Framework by Zuhaib - Google Sheets
I have put various parameters into 7 buckets:
L - Large - Sufficiently Large market cap, large market share, large revenues, large profits, large ROCE, large ROE, large CFO and FCF generation.
A - Adaptable - Adaptable and growing for last 5-10-20 years continuously. Growing Sales, Growing Profits, Growing EPS.
S - Strong - Zero debt, high cash flow generation from operations, no pledging of shares - strong balance sheet. strong cash flows
T - Tough - When market goes down, they don’t go down that much. They find new ways to generate business in tough times and cut costs, thereby increasing top line and bottom line both. They are able to find favourable long-term economics
I - Innovative - Innovative use cases, innovative products, innovative marketing, innovative distribution
N - New - Entering into New Categories, New Products, New grographies or creating New Markets - all boost growth in EPS (earnings) and expansion in PE multiple
G - Great - Great, expert, clean, and trustworthy management, Great Culture, Great Brands
Ideally, LASTING companies at good prices should be the key to long term investment heaven.
Please give me your feedback as I try to fine-tune my model.
Are there any parameters you would want me to include? Are there any parameters you think should not be in this model? Why will this not work? What are the amateurish things I am doing in this? How do I improve it? What has been your experience in searching for holy grail?
Thanks for your help.
Moderator, please feel free to edit/delete my topic, or move under a different heading as per community rules.