Process Of Stock Selection
We should get down to the drawing board while evaluating a particular company and focus on the basics, which include price to valuation and the company’s capacity to generate strong free cash flows.
Management of the Company
One of the most important in our stock selection process is the Corporate Governance and Management Track Record of a company.
Scalability and Product Strength
Product strength is the ultimate driver to generate returns in the future along with generating strong free cash flows. We also look out for turnaround stories and capabilities of the management to scale.
Field and Industry Research
We should meet with managements, customers, suppliers and competitors, while evaluating the strength of the company management team. With that we identify the key business drivers and industry trends.
Dividend Growth
Over time, companies that pay dividend are generally better managed. Dividend growth compounds returns and potentially reduces volatility. Companies with strong free cash flows and conservative balance sheets are best able to grow their dividends.
