LIPS Initial Stock Selection Criteria

We use these Criteria to select stocks prior to using the NAIC Stock Selection Guide.
You may find them helpful.

 

1. P/E Is it below the average for the sector? (AFR)
2. D/Y At least some is a good start. (AFR)
3. PRICE Is it nearer its 52 week low. (AFR)
4. SALES Should have been increasing for last 5 yrs. (Shareholder)
5. eps

Should have been increasing for last 5 yrs?
And do you think it will continue?

(Shareholder)
6. Return on Equity If it is above 12.5% great. (Shareholder)
7. Return on Sales Should also be increasing. (Shareholder)
8. Interest Covered More than 2 is desired. (Shareholder)
9. Debt to Equity
More than 50% is a problem. (Shares)
10. NAB If the Co. went into receivership tomorrow this is what each share is worth. If NAB = 2.5 and the Co. share worth$2.50 then maybe you'd get your money back. It indicates Co. liquidity. (AFR)

 

 

GOOD THINGS TO CONSIDER

Bear in mind a Company that is diversified and a market leader in its field.
Also a Co. that has something we all want or need to purchase.
With all this info on several Companies in the same sector you can compare and choose the one with the best value.
These are only general guidelines that we use for making our selections.
We do not recommend anyone use them as you must select your own criteria.