Dr. Chandrakant Sampat

Based on an interview.

  • Capital expenditure should be low.
  • Prefer companies with low debt or no debt.
  • Return on capital should be greater than 25%.
  • Good dividend-paying companies are worth studying.

Dr. Vijay Malik

Based on his eBook Peaceful Investing: A Simple Guide to Hassle-free Investing.

  • Approach: fundamental analysis, bottom-up stock picking, and growth plus value investing.
  • Prefer minimum debt.
  • Cash Flow from Operations (CFO) should be greater than Cash Flow from Investing (CFI) plus Cash Flow from Financing (CFF).
  • Look for sales and profit growth around 20% to 25%.
  • Compare company performance with peers and look for an advantage or moat.
  • To find a moat, compare year-on-year growth with peers over the past 10 years.
  • Compare profit margin with the industry.
  • Avoid companies at even the slightest sign of compromised integrity from promoters or directors.
  • For family businesses, check the qualification and experience of the next generation.
  • Watch promoter salary, especially when promoters want increments while profits decline.
  • Good management increases dividends when profits increase.
  • Prefer P/E below 10.
  • P/B is useful mainly for financial-sector companies where most assets are cash assets. It is less useful elsewhere because assets are often carried at historical cost.
  • Dr. Vijay Malik focuses on microcap and small-cap companies.
  • Find companies that can survive for the next 25 to 30 years.

Annual Reports

  • Read as many past annual reports as possible.
  • To understand an industry, read annual reports of companies in that industry.
  • Pay attention to the MDA section: Management Discussion and Analysis.