His Approach : Fundamental Analysis, bottom up approach, growth + value investing approach
Minimum debt
Cash Flow From Operations (CFO) > Cash Flow from investing activities (CFI) + Cash Flow from financing activities (CFf)
Growth of sales and profits (20 to 25)
Check performance of company compared to its peers & advantae ie. MOAT
To find MOAT, bufett checks growth rate year on year for past 10 years compare to its peers ( because of less time)
Profit margin compared to its industry.
Avoid companies when even the slightest sign of compromise of Integrity (Promotors, Directors)
If family business, then check the qualification and experience of next generation.
Salary drawn by promotros. ie. Promotors want increment when profits declined.
Good Management = Dividend increases when profit increases
P/E < 10
P/B is important in Financial Sctor when most of the assets are cash assets. Otherwise its not important due to adding of historical cost of company. (Warren Buffets also doesn't care about P/B)
Dr. Vijay Malik is focused on Microcap and smal cap
Find companies that would survive for next 25 - 30 years
Annual Reports
Read as much as past years reports.
To get idea of an industry, read annual reports of that company.