Investment Checklist

In this document, which is part of the Value Investing Boot camp video course on Udemy, you find a
checklist which can help you to consistently apply a value investment strategy. In a best case
scenario, you will answer yes to every item on the list. This is extremely rare though.

Initial Screening
1. Is the return on equity higher than 15%?
2. Is the current ratio higher than 2?
3. Is the debt-to-equity ratio lower than 0.5?

Fundamental Analysis
4. Are earnings per share stable or growing over time?
5. Are free cash flows approximately equal to- or higher than net income?
6. Are free cash flows stable or increasing over time?
7. Is free cash flow primarily generated from earnings rather than debt?
8. Is the company investing a part of its free cash flows in future growth?
9. Are cash & cash equivalents stable or increasing over time?
10. Is book value per share steadily growing over time?
11. Is the net margin stable or growing over time?
12. Has the return on equity been consistently high?
13. Has debt-to-equity been consistently low or decreasing?
14. Is the Altman Z-score 1.80 or higher?
15. Is the Beneish M-score lower than -2.22?
16. Are enterprising profits higher than 18%?

Qualitative Analysis
17. Is this company easy to understand for you? ("circle of competence")
18. Does the company possess a sustainable competitive advantage?
19. Are the possible risks this company faces manageable?
20. Is management compensation within reasonable bounds?
21. Do the key executives have a solid track record free of scandals?
22. Is management allocating the company's capital wisely?

Valuation
23. Is it possible to make a reasonable estimate of the intrinsic value of this company?
24. Did you make a conservative estimate using several valuation models?
25. Does the stock currently trade at a significant discount to intrinsic value? ("margin of safety")

Additional Notes:

1 www.valueinvestingbootcamp.com