Summary
- Part of my process is to go through a risk checklist. Stocks that don’t pass are put aside. Debt ratios and 3 models (Piotroski, Altman, Beneish) are used and shown.
- The article will go over the debt ratios and the 3 models that investors can use in their own process.
- General Electric and Mylan are used as examples of stocks that looked interesting but didn’t qualify.
In this article, I share part of my research process. As I’m a generalist portfolio manager who works on his own, I need to be able to go through several stocks relatively quickly. The first things I look at are valuation, risk, fundamentals, and story. Today I will talk about how I quickly assess risk, and how both General Electric (GE) and Mylan (MYL) didn’t pass.
General Electric (GE)
GE has been in the news as this “blue” chip’s stock has been tumbling, so I decided to take a look. My value model ranked it at 29% (the closer to 0%, the cheaper it is). I don’t usually look at anything above 20% but decided to make an exception this time because of the name.
