- Limit investable universe (geography, size)
- Exclude companies at risk of permanent loss of capital (accrual basis: net income > cash flow from operations)
- Gauge negative investor sentiment (price earnings or ev / ebit basis)
- Screen for quality
- Identify economic moat (long term FCF generation, long term return on capital, long term margin strength (gross, operating))
- Current financial strength (F-Score (3 elements): current profitability, current stability, operational improvements)
Notes / Diagrams