How do valuebuddies do their homework?

[D.L]

As I am a newbie in investing for like less than one year, sometimes I feel the way I am conducting my analysis is still not enough compared to many buddies here. Other than that, I can't seems to find any answer even I asked my myself many question and I am trying to find my way to improve my fundamental anaylsis skills.Luckily, since I started investing, my portfolio has not been in red. Able to advice how much analysis would be enough?

[D.L]

Just random questions:

1. Is profit or dividend/cash flow important?
My answer: I view dividends/cash flows more important than profits as the latter can be manipulated regardless of S-Chips or not. I tend to see the historical dividend yield rather than the historical PE, but off course best will be companies with high dividend yield and profitability.

2. Is profit margin or earnings yield important?
My answer: Profit margin. I prefer a company with higher stable profit margin with high PE than company with lower margin but low PE. Company with higher margin tends to withstand competition/crisis and cost increases but the opposite will easily swing into losses anytime.

3. Is cash rich or debt-free important?
My answer: It seems no sense if a company owns a huge cash pile but still on debts, so I actually prefer company which is debt-free though don't have lots of cash in the bank. I dislike company that hold on to cash for many years and yet not decide to re-invest or return, it causes me to doubt on the existence of this real cash.

On financial fundamental analysis, these are the 3 areas I will look into. What are your thoughts buddies?

1. I agree on that for the cash flow. Sometimes I do prefer using inverse P/E ratio (Earning yield) to see whether the returns is acceptable other than that I don't really care about the dividend yield although, it would be the best if the dividends yield is high enough.

2. High profit margin is good, however it's depends on the business model. For example, this company (Freight management holdings berhad ) listed on Bursa Malaysia has thin profit margins (it is increasing YOY) however it's profit has been increasing since it was listed. For freight forwarders industry, it tend to have thin profit margin as the business model are like a middleman.

(Just vested)

3. I prefer those company generating high ROE while employing little debt (like buffett acquisition criteria). For cash wise, as long as the cash is sufficient for wise acquisition or normal working capital use, I think it's fine on that.

Do correct me if I am wrong .

[specuvestor]

My answer is one only one-if they(insiders) want to do it all items can be manipulated. Including cash in the bank.

It is true to a certain sense, recent memories being Parmalat and Satyam

But it is akin to the defeatist saying of why bother since we will all be dead anyway. That is true too

Nonetheless most of the time there are red flags which we need to be actively aware of

[Temperament]

My answer is one only one-if they(insiders) want to do it all items can be manipulated. Including cash in the bank.

It is true to a certain sense, recent memories being Parmalat and Satyam

But it is akin to the defeatist saying of why bother since we will all be dead anyway. That is true too

Nonetheless most of the time there are red flags which we need to be actively aware of

My answer is we are not dead yet though all of us will eventually. i mean we have no choice since we are still living, we have to try to survive to the best we can. Dead the end of the story for everyone.

[stonedx]

Hi,

My first post here. I picked up a book recently and trying to analyze stocks. Welcome all inputs:

1. I look at positive cash flow from operating. Reason: the company main core business should have positive cash flow. If they have -ve cash flow for that particular year, I will look at the year annual report and see if it was a one-time off and if the rest of the companies in the same sector suffer the same.

2. Debt should be decreasing and cash (balance sheet) should be increasing over the years. Reason: this shows that the company is constantly keeping track of their balance sheet.

However, sometimes I find my homework time consuming to even go through all companies. I prepare an excel sheet for the FA. Is there any stock screener or any better approach? i know there is no shortcut to doing our homework.

like what Nick mentioned, think i should start reading the SGX annoucement too. This will allow me to look out for investment ideas.

thanks!