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valueinvesting's Introduction

ValueInvesting

For value investing dashboard Inspired by Sean Seah Book -- Gone Fishing with (Warren Buffett)[http://www.aceprofitsacademy.com/wp-content/uploads/2016/09/Gone-Fishing-with-Buffett.pdf]

Stocks Input Scraping

List of the companies through SP500, Russell, and self inputted

  • Getting SP500 stocks info from wikipedia
  • Getting russell stocks info
  • Adding own list of stocks info

Yahoo Stocks Price Scraping with Pandas DataReader

  • Find the shareprice by year and the following metrics:

Balance Sheet and Income Statement Extractions with Beautiful Soup

  • EPS
  • ROE
  • ROA
  • Long term debt
  • Total Income
  • Debt to Equity
  • Interest Coverage Ratio

Warning Signs List based on value investing logic

  • Given list of the companies, find out the feasibility to invest
    • Been in market minimal 10 years
    • Have the track records (EPS per year)
    • Have efficiency (ROE > 15%) -- Net income / shareholder equity
    • Determine manipulation (ROA > 7%) -- Net income / Total Asset
    • Have small long term debt (Long term debt <5* total income)
    • Low Debt to Equity
    • Ability to pay interest: (Interest Coverage Ratio >3) -- EBIT / Interest expenses

Decision Machine based on Marginal Price From Stocks EPS

  • Decision making from each company in terms of return rate given the value investing methodology
    • Find EPS Annual Compounded Growth Rate
    • Estimate EPS 10 years from now
    • Estimate stock price 10 years from now (Stock Price EPS * Average PE)
    • Determine target by price today based on returns(discount rate 15%/20%)
    • Add margin of safety (Safety net 15%)
    • Buy if market price is lower than the marginal price
    • Sell if market price is higher than the marginal price

Additional Assessments

  • Qualitative Assessment of the companies
    • Advantages in business (product differentiation, branding, low price producer, high switching cost, legal barriers to entry)
    • Ability of foolhardy management (even a fool can run)
    • Avoid price competitive business

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Contributors

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