🏰 Financial Ratios Cheat Sheet

#QualityTuesday

It’s #QualityTuesday!

In this series, I’ll teach you 5 things about the stock market in less than 5 minutes.

1️⃣ Financial ratios cheat sheet

Financial ratios can help you a lot to make better investment decisions.

Use this cheat sheet to your advantage.

2️⃣ How Peter Lynch selects stocks

Peter Lynch is one of the best investors in the world.

Here’s how he selects stocks:

• Trailing PE < 25

• Forward PE < 15

• Debt/Equity < 35%

• EPS Growth > 15%

• PEG Ratio < 1.2

• Market cap < $5 billion

Which stocks come to your mind? Let it know in the comments!

3️⃣ One simple investment quote

As an investor, you are your own worst enemy.

Always try to stay as rational as possible.

"A bull market is when you check your stocks every day to see how much they went up. A bear market is when you don't bother to look anymore.” - John Hammerslough

4️⃣ Netflix series

Do you watch Netflix from time to time?

Here you can find 7 great Netflix series about money and investing.

5️⃣ Example of a Quality Company

Evolution AB operates as a gaming company. The Company develops, produces, markets and licenses fully integrated B2B live casino solutions to online casino operators.

• FCF Margin: 52.9%

• ROIC: 21.5%

• FCF Yield: 3.3%

• Expected yearly FCF Growth (next 3 years): 14.6%

• CAGR since IPO: 72.3%

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About the author

Compounding Quality is a professional investor which manages a worldwide equity fund with more than $150 million in Assets Under Management. We have read over 500 investment books and spend more than 50 hours per week researching stocks.