I am trying to understand the 10.2 Quick Formula with Detailed Examples – from the book:- How to Avoid Loss and Earn Consistently in the Stock Market.
Could u please clarify below 3 doubts on it
Last three years average Return on Equity (ROE) and Return on
Capital Employed (ROCE) both are greater than 20%.
2. Debt to Equity Ratio is less than 1. (or heavily reducing for the last
3. Promoters pledge less than 10% of their total shareholdings, or there
is a clear indication that it will fall below 10% soon. (better if it is
4. Last three years CAGR sales growth rate is more than 10%
5. Last three years CAGR profit growth rate is more than 12%
Is my below screener formula is correct? I got 162 results and in the book they mentioned we will get around 40-80 stocks.Am I missing anything?
Average return on equity 3Years > 20 AND
Average return on capital employed 3Years > 20 AND
Sales growth 3Years > 10 AND
Profit growth 3Years > 12 AND
Pledged percentage <10 AND
Debt to equity <1
“If the stock under consideration has P.E ratio of more than two times of last
three years average EPS growth then avoid the same.”
For detailed clarification and logic, you can refer Chapter 5.
Is below thing is correct?
Price to Earning <Historical PE 5Years AND
PEG Ratio <2
If last three years annualised return is less than 10% and last one
year’s return is negative then mark as “Avoid”.
2. If last three years annualised return and last one year’s return both are
negative then avoid the stock.
3. Only consider stocks for investment having last three years
annualised return is more than 10% with last one year’s return is
Do I need to consider Return over 1year,Return over 3year for the above things or something different? Is my below formula is correct
Return over 3year >10 and
Return over 1year>0