Benjamin Graham, the mentor of Warren Buffet, has his wealth severely depleted during the Great Depression. Thereafter, he came up with a checklist for selecting stocks. Sad to say, performing these checks will not be able to yield us any hidden gems on the SGX today. The criteria:
1. Market Leader (at least 25% share)
2. Current Ratio > 2
3. Long term debt < Net Current Assets
4. Debt to equity ratio < 0.5
5. 10 years profits
6. EPS grow by 1/3 in 10 yrs
7*. 20 yrs of dividends
8*. av last 3 yrs PER < 15
9*. P/B ratio < 1.5
The last 3 criteria are deemed especially relevant by Mr Ooi Kok Wah, MRR Consulting.
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