Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
INTRODUCING ‘YOUR VIEWS’
We want to give readers a chance to have their say on key issues affecting investors.
Each week we will pose a series of questions and publish your responses in future editions of Shares. You can comment on our Facebook page, send us an email or interact via our Twitter account.
Send us your views and we’ll do our best to publish the best ones.
This week’s question...
What are the three most important factors you desire in a company when considering an investment?
1. High cash flow generation per sales unit as a percentage of overall capital employed.
2. Dividends per share growing faster than inflation at a steady payout ratio.
3. Lower levels of debt than its main competitors within its market sector.
John Innes, Email
1. Directors have ‘skin in the game’ (i.e. they own shares in their employer).
2. Small market cap that is under the radar, unloved, undervalued and potential to make significant change in cost and/or income structure.
3. Shareholder friendly with good, clear, regular communication.
John Griffiths, Email
1. Return on capital employed.
2. Business growth potential and risks.
3. Graham formula margin of safety.
Paul Smith, Email
1. The company must have a competent board of directors with a proven track record of generating investment returns for shareholders.
2. The board must have ‘skin in the game’ and have willingness to buy additional shares in the open market.
3. Must be in a niche that is growing, that I understand and the company’s specialism should enable medium to long term growth opportunities.
1. Cash flow.
2. Cheap but not too cheap.
3. To-the-point RNS announcements, no waffle.
1. Low or manageable debt.
2. Honesty and regular communication policy.
3. Risk versus reward.
1. Transparency/communication from the board.
2. True future asset value.
3. Monies invested, not diluted in corporate self funding.
1. Is their remuneration policy (including all directors) equitable and reasonable?
2. Clearly stated objective.
3. Cash management.
Now give us your opinion on:
1. What is the biggest stock position in your portfolio and why do you own it (in 50 words or fewer)?
2. What are the three biggest factors that would make you consider selling a stock from your portfolio?