Warren Buffett sticks to his investing philosophy. If you run a screen based on Buffett’s six investment criteria, here are:
Free cash flow (net income aftertaxes, plus depreciation and amortization,less capital expenditures) of at least $50 million
Net margins of at least 15%
Return of equity of at least 15% for each of the past three years and the most recently reported quarter.
A dollar’s worth of retained earnings generating at least a dollar of shareholder value for the past five years
Overpriced stocks are removed by comparing estimated discounted future cash flow five years from now with the current price.
Only stocks with a market capitalization of at least $500 million are included.Simply so!
The club dedicated to studying and applying the investing principles developed by Warren Buffett.
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