Legendary Investor Phillip Fisher's 15 point checklist in stock picking

Posted by Resource Center 13/06/2019 0 Comment(s) Investing, Finance & Economics,

Legendary Investor Phillip Fisher's 15 point checklist in stock picking

 

 

Investor Phillip A. Fisher

 

Legendary investor and author of book Common stocks & uncommon profits, Phillip A. Fisher gave the below 15 point checklist. For a company to be considered a great investment, it must tick most of them. (I'll start with his number 15 as my number 1 as it carries all the weight and the only absolute one in the list, a company without it should be avoided.) Here's the list:

  1. Unquestionable Integrity - invest only in companies where the management have unquestionable integrity
  2. Seek out companies whose management have the determination to develop new products/services.
  3. Expanding markets - invest in companies that has services/products which are addressing an expanding market. Expanding markets of this time are industries such as machine learning, autonomous drive, clean energy and the like. Also immortal industries such as farming & real estate that really will always have demand.
  4. Invest in companies with efficient research and development (R&D)
  5. Above average sales organization
  6. Pick companies with a handsome profit margin
  7. Invest in a company that keeps that profit margin into the future by taking measures such as cutting costs and the like.
  8. Invest in companies that treat employees (and vice versa, employees treating employers) like humans not like cogs in a wheel or just FTE (full-time employee) in an annual report.
  9. Invest in companies that have awesome executive relations. The executives of a company can make or break the venture.
  10. Invest in companies that have depth in management. Companies that are one-man shows may succeed for a while but companies where people grow can stay successful forever
  11. Invest in companies that have great cost analysis.
  12. Invest in companies that are outstanding compared to industry specifics. E.g.. if investing in retail look at how the company manages inventory or if in airlines look at how the company handles each available seat in the airline (my opinion, I don't think it is a good idea investing in the airline industry)
  13. Invest in companies that is long-range on profits - A company aiming for profits in the long run creates strong relations with their employees, customers and suppliers.
  14. Low risk dilution - Seek out companies where your shares run a low risk of being diluted in the future.
  15. Invests in companies that communicates risks. Actually companies that prioritizes risks & bad news. Avoid firms where the management brag about good news as soon as they get a chance to.

 

Phillip A. Fisher quote

 

For more in depth take-always, grab his book common stocks and uncommon profits.

 

 

 Phillip A. Fisher book

 

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Ian M. Mugoya

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