Mining Precious Gems

by Vinod Sreedharan

  the market.

  So in order to find GARP/GARV type stocks, we wil have to combine the

  Growth parameters (Sales/Profits/Margins/EPS etc) with the Value and

  Ratio parameters (ROE/ROCE/PE/PEG etc) and come up with fusion

  screens.

  This is essential y the zone of ‘​ Investing nirvana​’ where we attempt to find

  Growth stocks that market should ideal y favour at prices that are

  favourable to us - to make wholesome gains in terms of profit and return

  yield.

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  1) Return Ratio Compounders

  Summary: Identify companies that are steady compounders of their

  multi-year ROE, ROCE Return Ratios now available at PEG < 1

  Return on capital employed > Return on capital employed preceding year AND

  Return on capital employed preceding year > Average return on capital

  employed 3Years AND

  Average return on capital employed 3Years > Average return on capital

  employed 5Years AND

  Average return on capital employed 5Years > Average return on capital

  employed 7Years AND

  Average return on capital employed 7Years > Average return on capital

  employed 10Years AND

  Return on equity > Return on equity preceding year AND

  Return on equity preceding year > Average return on equity 3Years AND

  Average return on equity 3Years > Average return on equity 5Years AND

  Average return on equity 5Years > Average return on equity 7Years AND

  Average return on equity 7Years > Average return on equity 10Years AND

  PEG Ratio < 1

  Highlights:

  This screen uses a comparison logic to identify companies

  have augmented multi-year growth on Average Return Ratios and pruned

  the list to only include those with PEG Ratio of less than 1.

  2) ​EPS Growth with good Return Ratio set on yearly basis

  Summary: Identify companies that have shown good EPS growth on

  Yearly and Quarterly basis recently along with good ROE/ROCE/ROIC

  ratio available at PEG < 1.5

  EPS latest quarter > 1.2 * EPS preceding year quarter AND

  EPS latest quarter > 0 AND

  EPS latest quarter > 1.2 * EPS preceding quarter AND

  EPS > EPS preceding year AND

  EPS > EPS last year AND

  Return on equity > 20 AND

  Return on capital employed > 20 AND

  Return on invested capital > 20 AND

  Market Capitalization > 100 and

  PEG Ratio < 1.5

  Highlights:

  This screen uses a comparison logic to identify companies

  have good EPS growth along with ROE/ROCE/ROIC value of greater than

  20 with a PEG Ratio below 1.5

  3) ​EPS Growth with good value on multi-year Average Return Ratio

  Summary: Identify companies that have shown good EPS growth on

  Yearly and Quarterly basis recently along with good 3 year/5 year

  ROE/ROCE/ROIC averages available at PEG < 1.5

  EPS latest quarter > 1.2 * EPS preceding year quarter AND

  EPS latest quarter > 0 AND

  EPS latest quarter > 1.2 * EPS preceding quarter AND

  EPS > EPS preceding year AND

  EPS > EPS last year AND

  Return on equity > 20 AND

  Return on capital employed > 20 AND

  Return on invested capital > 20 AND

  Average return on equity 3Years > 20 AND

  Average return on equity 5Years > 20 AND

  Average return on capital employed 3Years > 20 AND

  Average return on capital employed 5Years > 20 AND

  PEG RAtio < 1.5

  Highlights: This screen uses a comparison logic to identify companies

  have good EPS growth along with multi-year average ROE/ROCE/ROIC

  value of greater than 20 with a PEG Ratio below 1.5

  4) ​Quarterly Growth with good average return ratios

  Summary: Identify companies that have shown good Sales/Profit growth

  numbers in recent times and have a good record on their Average Return

  Ratios.

  Return on equity > 20 AND

  Return on capital employed > 20 AND

  Return on invested capital > 20 AND

  Average return on equity 3Years > 20 AND

  Average return on equity 5Years > 20 AND

  Average return on capital employed 3Years > 20 AND

  Average return on capital employed 5Years > 20 AND

  Market Capitalization > 100 AND

  QoQ Profits > 20 AND

  QoQ Sales > 20 AND

  YOY Quarterly sales growth > 20 AND

  YOY Quarterly profit growth > 20

  Highlights:

  This screen uses a comparison logic to identify companies

  have good QoQ/YoY Profit and Sales numbers growth

  along with

  multi-year average ROE/ROCE/ROIC value of greater than 20.

  5) ​Quarterly growers with good recent yearly return ratios

  Summary: Identify companies that have shown good Sales/Profit growth

  numbers in recent times and have a good ROE/ROCE value on a yearly

  basis.

  Return on equity > 20 AND

  Return on capital employed > 20 AND

  Return on invested capital > 20 AND

  Market Capitalization > 100 AND

  QoQ Profits > 20 AND

  QoQ Sales > 20 AND

  YOY Quarterly sales growth > 20 AND

  YOY Quarterly profit growth > 20

  Highlights:

  This screen uses a comparison logic to identify companies

  have good QoQ/YoY Profit and Sales numbers growth along a yearly

  ROE/ROCE/ROIC return ratio value greater than 20

  6) ​Sales and Profit growth compounder with good set of Average

  Return Ratios

  Summary: Identify companies that have shown multi-year compounded

  growth in Sales/Profit g

  rowth n

  umbers a

  nd h

  ave g

  ood average R

  OE/ROCE

  value.

  Return on equity > 20 AND

  Return on capital employed > 20 AND

  Return on invested capital > 20 AND

  Average return on equity 3Years > 20 AND

  Average return on equity 5Years > 20 AND

  Average return on capital employed 3Years > 20 AND

  Average return on capital employed 5Years > 20 AND

  Market Capitalization > 100 AND

  Sales growth > 15 AND

  Sales growth 3Years > 15 AND

  Sales growth 5Years > 15 AND

  Profit growth > 20 AND

  Profit growth 3Years > 20 AND

  Profit growth 5Years > 20

  Highlights:

  This screen uses a comparison logic to identify companies

  have good multi-year Profit and Sales growth numbers growth along a

  healthy average ROE/ROCE/ROIC return ratio value greater than 20

  7) ​Yearly Sales and Profit growth with good Return Ratios available at

  PEG < 1

  Summary: Identify companies that have health growth and return ratios available at

  PEG Ratio < 1.

  Return on equity > 20 AND

  Return on capital employed > 20 AND

  Return on invested capital > 20 AND

  Market Capitalization > 100 AND

  Sales growth > 20 AND

  Profit growth > 30 AND

  PEG Ratio < 1

  Highlights:

  This screen uses a comparison logic to identify companies

  have go
od Sales/Profit yearly growth with ROE/ROCE/ROIC greater than

  20 and PEG Ratio < 1

  8) ​10% Allrounders

  Summary: Identify companies that have a 10% performance al -round on

  various growth and return ratio parameters

  Return on equity > 10 AND

  Return on equity preceding year > 10 AND

  Average return on equity 3Years > 10 AND

  Average return on equity 5Years > 10 AND

  Average return on equity 7Years > 10 AND

  Average return on equity 10Years > 10 AND

  Return on equity 5years growth > 10 AND

  Sales growth > 10 AND

  Profit growth > 10 AND

  YOY Quarterly sales growth > 10 AND

  YOY Quarterly profit growth > 10 AND

  QoQ Profits > 10 AND

  QoQ Sales > 10

  Highlights: This screen uses a comparison logic t o i dentify c

  ompanies a

  re

  growing at 10% al around - Sales/Profits/ROE/ROCE et al.

  9) ​Good historical Ratio performers at reasonable PEG value

  Summary: Return o

  f E

  quity c

  ompounding c

  ompanies a

  vailable a

  t P

  EG r

  atio

  < 1

  Return on equity > 10 AND

  Return on equity preceding year > 10 AND

  Average return on equity 3Years > 10 AND

  Average return on equity 5Years > 10 AND

  Average return on equity 7Years > 10 AND

  Average return on equity 10Years > 10 AND

  Return on equity 5years growth > 10 AND

  Sales growth > 10 AND

  Profit growth > 10 AND

  PEG Ratio < 1 AND

  Price to earning / Profit growth < 1

  Highlights: This screen uses a comparison logic to screen for stocks that

  are compounding the ROE over 10% over multi-years, have yearly

  Sales/Profit growth over 10% and available at PEG of below 1.

  10) ​Good ratio performers at reasonable PEG and Price/Sales value

  Summary: Return o

  f E

  quity c

  ompounding c

  ompanies a

  vailable a

  t P

  EG r

  atio

  < 1 and Price/Sales < 1

  Return on equity > 10 AND

  Return on equity preceding year > 10 AND

  Average return on equity 3Years > 10 AND

  Average return on equity 5Years > 10 AND

  Average return on equity 7Years > 10 AND

  Average return on equity 10Years > 10 AND

  Return on equity 5years growth > 10 AND

  Sales growth > 10 AND

  Profit growth > 10 AND

  PEG Ratio < 1 AND

  Price to earning / Profit growth < 1 AND

  Price to Sales < 1

  Highlights:

  This screen is similar basis as the previous screen 9) with

  added criteria of Price/Sales < 1

  11) ​ Quarterly Growth with Value

  Summary: Companies growing at 10% on Sales/Profit/ROE from a

  quarterly numbers perspective available at PEG Ratio < 1 and Price/Sales

  < 1

  Return on equity > 10 AND

  Return on equity preceding year > 10 AND

  YOY Quarterly sales growth > 10 AND

  YOY Quarterly profit growth > 10 AND

  QoQ Profits > 10 AND

  QoQ Sales > 10 AND

  PEG Ratio < 1 AND

  Price to Sales < 1

  Highlights: This screen uses a

  c

  omparison logic t o s

  creen f or s

  tocks w

  hich

  have YOY and QOQ Sales/Profits growing at > 10%, with ROE value of

  above 10 and PEG and P/S below 1.

  12) ​EPS growth at good valuation from PEG and Price/Sales aspects

  Summary: Companies growing at 10% on EPS quarterly and yearly

  numbers available at PEG Ratio < 1 and Price/Sales < 1

  Return on equity > 10 AND

  Return on equity preceding year > 10 AND

  PEG Ratio < 1 AND

  Price to Sales < 1 AND

  EPS latest quarter > 1.1 * EPS preceding quarter AND

  EPS latest quarter > 1.1 * EPS preceding year quarter AND

  EPS > 1.1 * EPS last year

  Highlights: This screen uses a

  c

  omparison logic t o s

  creen f or s

  tocks w

  hich

  have healthy E

  PS n

  umbers, R

  OE v

  alues a

  nd a

  vailable a

  t P

  EG below 1

  a

  nd

  P/S below 1

  13) ​Undervalued from Price/Book-Value, PEG and Price/Sales with

  good ratios and healthy Piotroski Score

  Price to book value < 2 AND

  Piotroski score > 7 AND

  PEG Ratio < 1 AND

  Price to Sales < 1 AND

  Return on equity > 15 AND

  Return on capital employed > 15

  Highlights: This screen uses a

  c

  omparison logic t o s

  creen f or s

  tocks w

  hich

  have healthy E

  PS n

  umbers, R

  OE v

  alues a

  nd a

  vailable a

  t P

  EG below 1

  a

  nd

  P/S below 1

  14) ​Good Valuations based on Misc. parameters

  Return on invested capital > 20 AND

  Earnings yield > 15 AND

  EVEBITDA < 10 AND

  Piotroski score > 7 AND

  Market Capitalization > 100 AND

  PEG Ratio < 1.5

  Highlights: This screen uses a comparison logic to screen for stocks that

  stand out based on a holistics set of miscel aneous valuation parameters -

  like ROIC/ EY/ EVEBITDA/ P-Score and PEG.

  Dividend Gems

  These screens look for stocks with a compel ing and consistent dividend

  yield which is another way of looking at stock return yield aside and apart

  from the gain due to stock price increasing from the purchase price.

  Consistency of dividend can also be somewhat inferred as ‘shareholder

  friendly or shareholder concerned’ management.

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  1) ​Increasing Dividend trend

  Summary: Companies growing their dividend over multi-year

  Dividend last year > Average 5years dividend AND

  Dividend preceding year > Average 5years dividend AND

  Dividend Payout > Average dividend payout 3years AND

  Dividend yield > 2.5

  Highlights: This screen u

  ses a

  c

  omparison logic t o s

  creen f or s

  tocks w

  ith a

  dividend yield of greater than 2.5 while consistently i ncreasing t he d

  ividend

  over a multi-year period.

  2) ​Good Dividend trend and good Valuations

  Summary: Companies growing their dividend over multi-year, available now at

  reasonable valuations

  Dividend last year > Average 5years dividend AND

  Dividend preceding year > Average 5years dividend AND

  Dividend Payout > Average dividend payout 3years AND

  Dividend yield > 2.5 AND

  PEG Ratio < 1 AND

&
nbsp; Price to Sales < 1

  Highlights: This screen u

  ses a

  c

  omparison logic t o s

  creen f or s

  tocks w

  ith a

  dividend yield of greater than 2.5 while consistently i ncreasing t he d

  ividend

  over a multi-year period, further pruning t he l ist to t hose a

  vailable a

  t P

  EG <

  1 and P/S below 1

  3) ​Quarterly growers with good Dividend Yield

  Summary: Companies with good QOQ and YOY Sales/Profit growth and a

  healthy dividend yield.

  Dividend yield > 2 AND

  YOY Quarterly sales growth > 10 AND

  YOY Quarterly profit growth > 10 AND

  QoQ Profits > 10 AND

  QoQ Sales > 10

  Highlights: This screen u

  ses a

  c

  omparison logic t o s

  creen f or s

  tocks w

  ith a