Checklist

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PE - Price to Earnings - below industrial average

This is how much you pay for the company to make $1 of earnings.

PB - Price to Book - Current share price/Book value per share (below 1.5)

Below 1- share price is less than value of assets (undervalued)

Above 1- more than value of assets

Book value is the net asset value of a company minus liabilities.

PEG = PE ratio / Earning growth rate (below 1.1)

Debt to equity is used to evaluate a companies financial leverage. More specifically, it reflects the ability of shareholder equity to cover all outstanding debts in the event of a business downturn.

RoE - Return on Equity (above 17%)

Debt to equity = Total liablilites / Total shareholder equity (below 1.5)

Current ratio is important. it measure wether it has enough money for short term debt. If it's below 1 = It doesnt have enough cash for debt

If it's above 2 = they are holding a large amount of cash, and not spending it on research.

Between 1 - 2 is good.

Current Ratio (between 1 - 2)

Price to sales = Market cap / Companies total sales

Price to sales utilises a companies market cap and revenue.

Dividend

I always look out for dividend companies. If it has a dividend then that normaly means it's a small company instead of a huge company like Apple.

Annual Growth in Earnings (above 7%)

Current Price vs Future Price

I use that as my main check. Check if the share is over or undervalued.

Taking £LLOY as an example;

Finally;

For the final value. I add up all the ticks and work out a percentage, then I do a checklist for 5 other companies and buy the company with the highest %, I buy.

Most data can be obtained either from FT.com or Simply Wall St.