Lesson 01 — Screening Criteria for Quality Companies
Week 11 · Lesson 1 of 3 · Week 11 — Building a Watchlist
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Use InvestingSamjho's Screener with these criteria to find quality companies: | Criteria | Threshold | Why | |||| | ROE | 15% | Good capital efficiency | | R...
The beginner quality filter
Use InvestingSamjho's Screener with these criteria to find quality companies:
Minimum quality filters
| Criteria | Threshold | Why |
|---|---|---|
| ROE | > 15% | Good capital efficiency |
| ROCE | > 15% | Good return on total capital |
| D/E Ratio | < 1 | Low financial risk |
| Net Margin | > 8% | Decent profitability |
| Revenue Growth (3yr) | > 10% | Growing business |
| Promoter Holding | > 40% | Skin in the game |
| Promoter Pledge | < 5% | Low promoter risk |
Additional nice-to-haves
- Interest Coverage > 3×
- Positive Free Cash Flow for 3+ years
- CFO/PAT > 0.8
- No auditor qualifications
How to use the screener
- Go to InvestingSamjho → Screener
- Set
periodType= annual,natureOfReport= Standalone - Add criteria one by one
- Run the screen
- You'll get a list of companies meeting ALL criteria
Start broad, then narrow
Start with just ROE > 15% and Revenue Growth > 10%. See how many results you get. Then add more filters to narrow down.
Key takeaway
A watchlist is not a buy list. It's a shortlist of companies worth studying in detail using everything you've learned.