The quantitative and qualitative factors when analysing a company
There’s not one metric that makes a company investable. Here are some of the quantitative and qualitative factors I consider when analysing a company
Quantitative
Consistently high return on capital Consistently high FCF growth rate Expanding profit margins (operating efficiency)
Prudent and sustainable approach to SBC, buybacks and dividends
Capital and asset light
Affordable debt
Qualitative
Recurring revenues
Affordable product that customers are highly dependent on (ideally mission critical) and unlikely to be cut during a downturn
Sales not highly cyclical Product not overly reliant on raw materials and therefore profitability not tied to commodity cycles Barriers to entry and barriers to scale
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
