5-Step Value Investing Formula

Screen thousands of stocks with a few criteria to narrow to 50 with fundamentals, using dot com, a free online screener, with P ratio below 15 and ROE above 15.

Explore ROA as net income over assets, understand asset-heavy vs asset-light with thresholds below 5% and above 20%, and recognize the role of financial leverage.

Analyze historical stock performance to identify solid, stable firms with consistently growing earnings and cash flows; prefer long track records over new ventures, as Buffett demonstrates with Walmart and Coca-Cola.

Evaluate growth signals using Google Trends to distinguish healthy, sustainable growth from volatile or declining trends; assess consistency, fluctuations, and confidence with supplementary numbers before investing.

Analyze revenue and earnings as profitability indicators, monitor net profit margin trends upward, and compare margins to competitors to identify superior competitive advantage and resilience.

Explore free cash flow per share and how excess cash after operations drives growth, dividends, debt reduction, and share buybacks, shaping long-term value.

Use book value per share as a useful measure of a company's growth, reflecting its long-term strategic position over short-term earnings, and track bvps over time to gauge intrinsic value.

Screen for strong fundamentals, assess past performance, and estimate intrinsic value to buy only when price is below intrinsic value, applying a margin of safety and a free target-price calculator.

Learn to compare stock price with intrinsic value, identifying undervalued opportunities when price falls below value, and adopt a disciplined, patient approach to buy at a discount to intrinsic value.

Understand how the discount rate links future cash flow to present value by combining the time value of money, inflation, and a risk premium above the risk-free rate.

Learn to balance quantitative metrics with qualitative analysis to assess a company's future prospects, competitive advantages, pricing power, and customer love, illustrated by Kodak's cautionary example.

Explore how high switching costs and cancellation penalties preserve pricing power by locking in customers through integrated software ecosystems, specialized training, and switching barriers across tech, design, and medical industries.

Analyze growth plans by reading the CEO's message and investor communications to gauge forward-looking strategies and future growth directions, using company websites and newsroom updates as evidence.

Analyze market share to gauge competitiveness and growth, noting whether share keeps pace with market growth and leaders dominate a few players, reflecting profitability potential in GSK's health care.

Assess a company's qualitative aspects, internal business model, economic moment, growth plans, and external environment; compare with competitors, analyze industries in decline, and identify key risks.

Screen stocks with quantitative criteria and analyze historical growth to find undervalued firms with strong fundamentals. Qualitatively assess industry, competitors, and future plans, then time buys using technical analysis.

Identify bullish and bearish signals to time stock entries, recognizing how supply, demand, and investor sentiment drive trends, and use patience to wait for true value.

Use the Stucky website to practice stock signals, interpret bearish indicators, resistance and support, and moving averages with convergence divergence and relative strength index to guide buy/sell decisions.