By John Kingham
Here are the tools I use to analyse stocks and manage my portfolio:
1. Investment spreadsheet
When analysing a company, the first thing I do is make a copy of this Investment Spreadsheet (it’s a Google Sheet) and then fill in ten years of financial data which I get from SharePad and the company’s annual reports.
If the company has all or at least most of the features I’m looking for (e.g. consistent growth, consistent dividends, high profitability, low debts) then I’ll review the company in more detail using a checklist.
2. Investment checklist
I use this Investment Checklist (a Google Doc) to help me answer these four important questions:
- Diversity: Is the company a good fit with your existing portfolio?
- Quality: Is this a quality company?
- Defensiveness: Is this a defensive company?
- Value: Is this company good value?
If the company offers an attractive combination of diversity, quality, defensiveness and value, and assuming it’s a good fit with my portfolio, I’ll publish the completed checklist in my monthly investment newsletter and add the company to the portfolio a few days later.
If I’m thinking about selling a company I’ll work through the same process, but this time to make sure it doesn’t have a good combination of quality, defensiveness and value.
3. Defensive value stock screen
To make the task of finding attractive investments easier, I use a stock screen which I’ve developed over many years. It contains about 200 FTSE All-Share companies with long track records of dividend payments.
The screen ranks each company by a combination of its growth rate, growth quality, profitability, debt level and valuation ratios, all of which make up the quantitative side of my investment strategy.
The stock screen is available as a PDF and spreadsheet to subscribers of my monthly investment newsletter.