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How do you select investments? |
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I do not have a fixed source of
investments. I try to remain as open as possible to
new ideas.
In the past my ideas have come from:
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The screening of stock markets world-wide using time tested investing criteria such as low
price to earnings, high return on equity, low debt and low price to
book ratios.
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Interesting companies read about
in books, magazines or internet
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Unusual companies mentioned by
family and friends
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Following investments of fund
managers we admire
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Discussions with fellow investors and
newsletter readers
I however know my limits and do not invest in companies we do not understand.
Once I have identified an interesting company we conduct a financial analysis which consists of the following:
Once I am satisfied with all of the above do I invest
Financial analysis example (PDF 27 KB)
Also have a look at:
My Investment Philosophy
Our Expert
P.S. A media company in the wrong country at the wrong time...

This month the company I found for subscribers is located in France.
In terms of the size of companies I look at its quite large with a market value of €1,72 billion.
The company owns the most popular television channel in one of the largest European countries but is also very active in new media channels including the internet, tablets and smart phones.
In spite of this, the market views it as an old media company that is soon going the way of the dinosaurs. However, when you look at its financial statements you will see what a great business it is.
Its balance sheet is solid with no debt, and it generates a high amount of free cash flow and profits. This enables it to pay a dividend of just under 7% that can easily be maintained and has room to increase.
When I recommended the company it was trading at 7 times free cash flow, 7,7 times 2010 earnings and 5,6 times EBIT to enterprise value.
I am sure you will agree this is undervalued.
To immediately get your hands on this value investment idea (for as little as €39) click here.
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