A company would have to meet seven of the following ten criteria To even have a chance of satisfying seven criteria, the company has to be profitable.
If company is profitable, the chance of it satisfying criteria 4 and 5 is negligible. There are some Chinese (and some Japanese - yes, Clownbuck?) companies that are profitable and satisfy criteria 4 and 5. In USA, you'd be lucky if you found couple microcaps that satisfy this.
So we are down to eight criteria with seven to be satisfied. Now we go to criterion 10 - there are very few companies that satisfy this in 2008/2009 frame, so we are left with seven criteria, all of which have to be satisfied. To satisfy criterion 3, company has to pay dividend, so you have to look only at dividend paying companies with yields greater than 2/3 of AAA bond...
On the positive side, bonds yield almost nothing, so criterion 1 is easy and criterion 3 is somewhat easy for divvie paying companies. Criterion 2 is somewhat easy too, companies are still at low PEs. Criterion 6 is easy, since most companies are delevered. Criterion 7 is IMHO worthless - I never understood fascination with current ratio - it makes sense only for companies close to bankruptcy, not for healthy companies. Healthy company can always get cash, so current ratio is pretty much meaningless for anything that is not Kmart...
Criterion 8 is easy for unlevered companies. Criterion 9 is passable.
So overall, you may be able to find some companies that satisfy criteria 1,2,3,6,7,8,9. Might be able to swap 10 for 3 or 7 for a few cos, though not many. |
