Filetype Excel XLSX | Posted on 16 Aug 2022 | 3 years ago
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160x Filetype XLSX File size 0.33 MB Source: lewishardinginvest.com
Sheet 1: Resources
| Analysis Process | ||||||||||
| Warren Buffet's rules for investing | Tom Gaynor's 4 pillars of investing | |||||||||
| Vigilant Leadership & Managment | Profitable & high returns on capital using low leverage to do it (More leverage means more fragile) | |||||||||
| Long term prospects | People managing the company with equal measures of talent & integrity | |||||||||
| The company is stable & understanbable | Reinvestment opportunities & room to grow. Acquisitions, dividends & share repurchases | |||||||||
| Buy a business at a very attractive price | Buy at a fair price | |||||||||
| Fundamental Analysis | ||||||||||
| Profit & Loss | ||||||||||
| NP% > 10% consistently | ||||||||||
| All margins higher than competitors | ||||||||||
| Revenue Growth | ||||||||||
| Profit Growth | ||||||||||
| Balance Sheet | ||||||||||
| Overall Retained Earnings growth over the past 10+ years | ||||||||||
| Return on Equity > 15% | ||||||||||
| ROE% higher than competitors | ||||||||||
| Long Term Debt / Equity < 50% | ||||||||||
| Companies with no to little long term debt - can pay all LTD with 4 years of previous net income | ||||||||||
| Current Ratio > 1 | ||||||||||
| Decreasing Share Count | ||||||||||
| Dividend Growth | ||||||||||
| Previous Acquisitions | ||||||||||
| Cash Flow Statement | ||||||||||
| Capex/Net icome <25%/<50% | Look what the company is using the money for - e.g. growing the business | |||||||||
| Free Cashflow Growth | ||||||||||
| MOS | ||||||||||
| Also, you must determine how much of a margin of safety you'll require before buying a stock. If the firm is not very risky, you could be content with a 15%-20% discount to its fair value. If the firm is riskier than average, you may demand a 30%-40% discount. Ultimately, it's your decision. | The beauty of fat-pitch investing is that it has two built-in factors that help offset the risk that your fair value estimate is wrong. First, by requiring a margin of safety, you've given yourself some "error cushion," just in case your estimate was too high. Second, by purchasing wide-moat companies, chances are high that the firm will increase in value over time. Thus, even if your estimates were way off, the firm--and its stock price--will likely appreciate in value, eventually catching up to your fair value estimate. In effect, by buying wide-moat companies, you have another margin of safety built into your investment. | |||||||||
| Ongoing analysis | ||||||||||
| Once you have bought the company, put the earnings dates in my google calendar with reminders | ||||||||||
| Read the 10Q's every quarter and then the 10K (Annual report) every year | ||||||||||
| When to sell? | ||||||||||
| When a company may lose it's competitive advantage | ||||||||||
| Crazy bull market - P/E > 40 | ||||||||||
| Analysis Checklist | |||||||||||||||||
| Stock Symbol | NASDAQ:GOOGL | ||||||||||||||||
| Company Name | Alphabet Inc Class A | ||||||||||||||||
| Information | |||||||||||||||||
| Market Cap | 1555.6B | ||||||||||||||||
| Current Price | 2299.93 | ||||||||||||||||
| Earnings per share | 62.55 | ||||||||||||||||
| Price/Earnings Ratio | 36.77 | ||||||||||||||||
| Earnings Yield | 2.72% | ||||||||||||||||
| Pillar 1 - Profitable & high returns on capital using low leverage | |||||||||||||||||
| Net Profit Margin > 10% | Yes | ||||||||||||||||
| Return on Equity > 15% | Yes | ||||||||||||||||
| Long Term Debt/Equity < 50% | Yes | ||||||||||||||||
| Current Ratio > 1 | Yes | ||||||||||||||||
| Pillar 2 - People managing the company with equal measure of talent & integrity | |||||||||||||||||
| Length of Tenure | Yes | ||||||||||||||||
| Strategy & Goals | Yes | ||||||||||||||||
| Inside Buying | Yes | ||||||||||||||||
| Compensation | Yes | ||||||||||||||||
| Pillar 3 - Reinvestment opportunities & room to grow. Acquisitions, dividends & share buybacks | |||||||||||||||||
| Revenue Growth | Yes | ||||||||||||||||
| Free Cashflow Growth | Yes | ||||||||||||||||
| Profit Growth | Yes | ||||||||||||||||
| Retained Earnings Growth | Yes | ||||||||||||||||
| Decreasing Share Count | Yes | ||||||||||||||||
| Dividend Growth | No | ||||||||||||||||
| Previous Acquisitions | Yes | ||||||||||||||||
| Pillar 4 - Buy at a fair price! | |||||||||||||||||
| PE Ratio < 20 | No | ||||||||||||||||
| P/CF Ratio < 20 | No | ||||||||||||||||
| DCF calculation - 10% return | 1,494 | ||||||||||||||||
| Margin of safety - Percentage | 0% | ||||||||||||||||
| Margin of safety - Amount | 0.00 | ||||||||||||||||
| Entry price | 1,493 | ||||||||||||||||
| Price Needs To Fall By - Amount | -807 | ||||||||||||||||
| Price Needs To Fall By - % | -35% |
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