M - Momentum In Return Ratios The RoE, RoCE or the Free Cash flows of company must
Q - Quality Return ratios versus its peer as well as broader stock universe.
C - Capital Allocation Management strategy on Allocation of funds
360 Degree Deductive Logic Framework
Sustainable Valuation possible & factors impacting while identifying when market
is underpricing the company
Outlook on the company Financials-why a company is considered trading below its
Building a detailed business & financial model to realize the sources of earning
& quality delta for the company.
Management strategy in terms of its finances particularly in terms of source & deployment
of capital, marketing strategy in terms of its products, segments, pricing etc.
State of addressable market & identifying the changing dynamics of that addressable
Earnings & Quality: Both should be evolving in linear manner
There are three moving parts in terms of fundamental- stock price relation. These
are changes in earnings, quality and valuation. Every company in its evolution passes
through various stage of its progress. We prefer buying where linearity or a consistent
positive delta is expected in earnings profile and the quality profile of the company.
A stock before selection for portfolio should be first identified into what stage
it is into.