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Compounding Quality Profile picture
@QCompounding
Aug 2 • 3 tweets • 1 min read Twitter logo Read on Twitter
How to analyze a balance sheet: Image
That's it for today.

If you liked this, you'll LOVE our free course which teaches you everything you need to know about Financial Analysis.

Receive it for free here: https://t.co/j4z2B2RpcUeepurl.com/h9kw29
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Source: @ChristianWattig

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More from @QCompounding

Compounding Quality Profile picture
Aug 3
In the end, Cash Flow is all what matters.

Here are 6 important Cash Flow Ratios: Image
1️⃣ Cash flow-to-Debt Ratio

• Indicates how long it would take a company to repay its debt if it devoted all of its cash flow to debt repayment.

• Cash Flow-to-Debt = (Total Debt / Cash Flow from Operations)

• Seek for companies with a Cash Flow-to-Debt lower than 3.
2️⃣ Operating Cash Flow Margin Ratio

• Compares a company's operating cash flow to its net revenue over a specified period.

• Operating Cash Flow Margin = (Cash Flow From Operations / Net Revenue)

• Seek for companies with an Operating Cash Flow Margin higher than 10%.
Read 9 tweets
Compounding Quality Profile picture
Aug 2
Quality matters.

This list returned more than 15% per year over the past 10 years.

Here are 15 Quality Stocks you should know: Image
1. Visa ($V)

Visa is a great quality business with a wide moat and incredible profit margins. The secular trends toward electronic payments gives Visa a lot of tailwinds.

- FCF Margin: 61.0%
- ROIC: 28.2%
- FCF Yield: 3.3%
- Exp. FCF Growth (3 yr): 15.6%
- CAGR since IPO: 23.0% Image
2. Moody's ($MCO)

S&P Global, Moody’s and Fitch dominate the credit rating market. They were the market leaders in 1980 and probably will still be in 30 years from now.

- FCF Margin: 21.8%
- ROIC: 15.0%
- FCF Yield: 2.2%
- Exp. FCF Growth (3 yr): 18.0%
- CAGR since IPO: 15.7% Image
Read 17 tweets
Compounding Quality Profile picture
Aug 1
How to find great stocks in less than 5 minutes:

1️⃣ Attractive company profile
2️⃣ Profit margin > 15%
3️⃣ ROIC > 15%
4️⃣ Historical value creation stock > 10%/year
5️⃣ EPS Growth > 12%
6️⃣ Reasonable valuation

I'll show you step by step:
1️⃣ Attractive company profile

Make sure that you understand how the company makes money.

You want to invest in companies active in a clear secular trends.

Examples of secular trends are obesity, digital payments and cybersecurity.
2️⃣ Profit margin > 15%

The higher the profitability, the better.

Look for companies with a gross margin of at least 50% and profit margin of at least 15%.
Read 9 tweets
Compounding Quality Profile picture
Jul 30
🏆 This portfolio massively outperformed the S&P500

It probably will continue to outperform over the next decade too

Here are 15 Quality stocks you've never heard of: Image
1. OTC Markets

OTC Markets Group operates the traded securities markets. The Company regulates the trading systems and connects a diverse network of broker-dealers.

- FCF Margin: 35.1%
- ROIC: 64.9%
- FCF Yield: 3.6%
- Exp. FCF Growth (3 yr): 13.6%
- CAGR since IPO: 26.8% Image
2. Medpace

Medpace provides cardiovascular, hematology, oncology, neurology, pediatrics, nephrology, and diagnostic services.

- FCF Margin: 24.1%
- ROIC: 38.7%
- FCF Yield: 4.4%
- Exp. FCF Growth (3 yr): 10.8%
- CAGR since IPO: 40.6% Image
Read 18 tweets
Compounding Quality Profile picture
Jul 29
I have an MBA an am working as a professional investor.

Over the years, I've learned way more on Youtube than I did in school.

Here are the 7 best Youtube videos I've ever seen about investing:
1. CNBC's full interview with Berkshire Hathaway CEO Warren Buffett: Image
2. The ultimate guide to the stock market by Peter Lynch: Image
Read 9 tweets
Compounding Quality Profile picture
Jul 28
It costs $80,000 per year to study at MIT.

But they have a lot of courses which you can follow for free:

1. How to make investment decisions Image
2. Financial accounting: Image
3. What is capitalism? Image
Read 8 tweets

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