This is the general criteria/checklist that I go through each time when I examine an investment opportunity. This is neither an exhaustive enough list to cover all the possibilities nor specific enough to cover each aspects of individual companies. Not all the points are applicable in all cases.
- Honest,
competent and minority shareholders friendly management who owns portion
of the company
- Decentralized
corporate culture geared to keeping employees focused on customers and
management focused on shareholder value over the long run
- Industry
with little risk of being disrupted by new technology or changes in
consumer preferences in future
- Product
or service that is unique for customers it seeks to serve and from
competitors
- Reasonable ability to increase the price of the products
- Large
addressable market size and dominant market share
- Low
financial leverage
- Little
required capital investment
- Return
on invested capital greater than 15% over long period of time and likely
to continue in the future
- Selling
for a price which is less than 7 times pretax income
- Reporting
in a country with regulatory protection for minority shareholders
- Other respected value-oriented investors as shareholders
