15 Point Checklist
Philip 15 Questions , a quality study rather than a quantitaive one.
Getting to the heart of the business and what makes the business tick?
- Expanding Market! Does the company have the products or services with sufficient market potential to make possible a sizeable increase in sales for at least several years.
- Create New Products! Does the management have a determination to continue to develop products or process that will still further increase total sales potentials when the growth potentials of currently attractive product lines have largely been exploited.
– Apple , Samsung - RND should be Efficient ! How effective are the companu’s R&D in relation to its size ( Large R&D sucks)
- Recurring Sales? Does the company have an above average sales organization ( The making of repeated sales )
– In software its subscription service
– In retail can observe inventory turn over to see if stuff are selling out fast. - Good Margin ! Does the company have a worthwhile margin .
– (10% and above?) - Keeping the Margin? What is the company doing to maintain or improve profit margin
- Does the company have outstanding labor and personnel relations
– ( Nagaworld is a bad example, glass door ? ) - Does the company have outstanding executive relations
– ( Nepotism ? Overpaying Management?) - Does the company have depth to its management?
– No one man shows.,. - How good are the company cost control ? avoid bad cost controls.
- Great Industry Specifics?
- Does the company have long range outlook of profits? ( Strong relationship with suppliers, employees & dont destroy brand with price cut)
- Sharehold dilution in the future? No share dilution in its history is better
- Does the management talk about things freely
- Management has integrity issues? ( Criminal Management or Scandals)
Scuttle-Bud Method
Talking to “Main-Street” resources
- Talking to suppliers, customers, research scientist, trade association or employees.
- Customer Reviews ? GlassDoor Reviews? Competition Reviews?
- Talk to people in the industry.
- Travel , Retail Bloggers?
The Fishing Process.
Finding my own fishing process:
- Start with a 1000 Stocks , A Stock Screener ( HK, Malaysia, Uk, Singapore) – filters by fundamentals->
- Filter down to 50 Stocks, A Sector Analysis & Business moat breakdown & Catalyst Study & Valuation ->
- Filter down to 3 stocks-> Management, Insider Buying ->
- Found 1 Stock -> Hook a Fish!
