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Strategies & Market Trends : Value Investing

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To: Wallace Rivers who wrote (5239)11/7/1998 11:17:00 AM
From: MCsweet  Read Replies (1) of 78825
 
After fine-tuning my strategy a bit (from past couple
years experience as well as reading books by
O'Shaugnessy and Dreman recently), I have come up with
my stock selection criteria:
*
1. Price/Book < 1 or near 1
2. Price/Sales < 1
3. Debt < .4 * equity (more stringent on small caps,
less stringent on large caps)
4. No accounting irregularities or hint thereof
5. Strong cash flow, low PE, dividends all a +

* Check goodwill --- if Price/Book is >> 1 with goodwill
removed than don't buy stock.

Criteria 1+2+5 => establish a bona-fide value stock
Criteria 3+4+5 => make sure company will stay in business
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