How To Pick Quality Shares : A three-step process for selecting profitable stocks / Phil Oakley.

Format:

Book

Author/Creator:

Oakley, Phil (Investment analyst), author.

Language:

English

Subjects (All):

Investments.

Stocks.

Physical Description:

1 online resource (166 pages)

Edition:

First edition.

Place of Publication:

Petersfield, Hampshire, England : Harriman House Ltd, 2017.

Summary:

How to Pick Quality Shares provides a three-step process for analysing company financial information to find good investments: finding quality companies; avoiding dangerous or risky companies; and not paying too much for companies' shares. Applying the in-depth techniques described here will give investors a fuller understanding of how companies really work, and an edge over other investors, including professional investors and analysts.Phil Oakley, an experienced investment analyst and private investor, guides the reader step-by-step through these three stages: 1. For the first step, he shows how to identify the kind of high-quality companies that are likely to be profitable investments over the long term. Important themes are how much a company earns on the money it invests, reliable measures of profit, and the importance of cash flow. 2. Next, he shows how to spot dangers and risks that can lead to a company that is superficially attractive turning out to be a bad investment. Here the focus is on how to analyse debt, in particular hidden debt and pension fund deficits. 3. Lastly, he shows how to value a company's shares and determine what is a reasonable price to pay to invest in that company. Phil shows why some common shortcuts to valuing shares are unhelpful, and how to use cash profits to value shares more reliably.No longer is in-depth financial data and analysis the preserve of the City. Private investors have access to all the information they need to make well-informed investment decisions. But still many investors lack the confidence to back their own judgment. How to Pick Quality Shares will give you this confidence - improving your skills and making you a more profitable investor.

Contents:

Intro

Contents

About the Author

Preface

What this book covers

Who this book is for

How this book is structured

Introduction

My approach to investing

Part 1 - How To Find Quality Companies

1. Profits

1. Sales and profit history

2. Profit margin

2. A Company's Interest Rate

Return on capital employed (ROCE)

DuPont analysis

The company report

3. Introducing Free Cash Flow

Why profits and cash flow are not the same number

The importance of free cash flow for investors

How to calculate free cash flow

How companies produce lots of free cash flow

4. Advanced Free Cash Flow Analysis

1. How do you know if a company is spending enough?

2. Is negative free cash flow always bad?

3. Combining ROCE and free cash flow: CROCI

4. Free cash flow per share

5. Checking the safety of dividend payments

6. When free cash flow may not be what it seems

7. Manipulation of free cash flow

Part 1 Summary - How to Find Quality Companies

Part 2 - How To Avoid Dangerous Companies

5. The Dangers of Debt

The risk of debt: shareholders get paid last

Understanding financial gearing

Measuring a company's debt

Using debt ratios to analyse companies

Different types of debt

When does the debt have to be paid back?

When larger debts are not a problem

6. How Debt can Fool You

Financial engineering

7. Hidden Debts

How to analyse companies with hidden debts

Domino's and its hidden debts

How to analyse a company with large rental agreements

The impact on ROCE

Be wary of sale and leasebacks

8. The Dangers of Pension Fund Deficits

Types of corporate pension schemes

BT's final salary pension scheme

Identifying big pension fund deficits.

Pension fund deficits and the investor

Part 2 Summary - How to Avoid Dangerous Companies

Part 3 - How To Value A Company's Shares

9. The Basics of Share Valuation

The fair value of a share

Don't use the PE ratio

10. Calculating a Company's Cash Profits

Free cash flow may not be the best measure for valuing companies

How to calculate a company's cash profits

11. Using Cash Profits to Value Shares

1. Cash yield or interest rate

2. Earnings power value (EPV)

3. Setting a maximum price

The importance of growth

Final thoughts on valuation - can quality be more important than price?

Part 3 Summary - How to Value Shares

Appendices

Appendix 1 - The Power of Lease-Adjusted ROCE

Appendix 2 - FTSE 100 Data

Appendix 3 - High-Quality Companies and Shareholder Returns (2007-2016)

AG BARR

British American Tobacco

Cranswick

Dignity

Diploma

Domino's Pizza

Fidessa

InterContinental Hotels

Paddy Power Betfair

Reckitt Benckiser

RELX

Rightmove

Sage

Spirax-Sarco

Unilever

Appendix 4 - FTSE All-Share Sector ROCE Analysis

Appendix 5 - Glossary

Appendix 6 - Where to Find Data

Publishing details.

Notes:

Description based on print version record.

ISBN:

9780857196071

0857196073