Investment Strategy ...

In my experience, companies which match following metrics tend to be good investments ...

(1) ROIC(5yr avg) ~> 15 %
(2) Sales growth(5yr avg) ~> 15 %
(3) EPS growth(5yr avg) ~> 15 %
(4) Equity Growth(Y/Y) ~> 15%
(5) Cash Flow growth(Y/Y) ~> 15%

Thoughts behind this strategy?

(1) Return on Investment is calculated by dividing Net Profits by Investment. The Investment part includes the long term capital owned by the shareholders as well as the long term debt carried by the company. the ROIC ratio indicates how much the company is making on the invested capital.

(2) EPS Growth Rate - It sort of ties multiple key operating metrics of Company viz Revenue, Income/Profit. Any investor would like to be part of a company which is making lots of $ as well as growing at a real good rate.

(3) Sales Growth Rate - If infact a company is growing, it is ideal that it grows based on the actual Sales and not because of consequence of some non-operational gains.

(4) Equity Growth Rate - Indirect indication of how the cash is being generated and eventually ploughed into Equity.

(5) Cash Flow - What does business operate for? To make real cash. A company which generates hard cash is something that has to be there.

Where to look for ready made information?

http://www.investor.reuters.wallst.com/stocks/Ratios.asp?rpc=66&ticker=WTM

An example?
























For Cash Flow & Equity Growth check out "Financial Statements" from the above link.

This is just beginning of the Investment Research phase. Next comes, researching of the following ...

* Management
* Product Portfolio
* Future estimated EPS growth (<15%)
* Future estimated P/E (<10)

DISCLAIMER: Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice.