Chapter 4 My watchlist

4.1 Comprehensive financials4

Figure 4.1: Summarized statistics of my watchlist

Figure 4.2: Income statement, balance sheet, and cash flow data over the last 4 years

Table 4.1: Glossary
Term Meaning
Adjusted Graham formula Defined here
BVPS Book value per share
DCF10 Discounted cash flow per share in 10 years as defined here
EPS Earnings per share
High52 52-week high price
IC Invested capital
Industry PER Data from here
Low52 52-week low price
NOPAT Net operating profit after taxes
Payback8 8-year payback time buy price of the whole company (Town & Town, 2018)
PBR Price/book-value ratio
PEG Price/earnings-to-growth ratio
PER Price/earnings ratio
PSR Price/sales ratio
ROA Return on asset
ROE Return on equity
ROIC Return on invested capital
Sustainable growth rate ROE \(\times\) retention ratio

4.2 Key financials

Key financials of my watchlist

Figure 4.3: Key financials of my watchlist

Scatterplot of key statistics

Figure 4.4: Scatterplot of key statistics

4.3 Big four numbers

Trends of big 4 numbers over the last 3 to 4 years (depending on data availability at Yahoo Finance) are shown below. All numbers are normalized to 100 (if positive) or -100 (if negative) as of the first year with available data for each company.

Total revenue

Figure 4.5: Total revenue

Net income

Figure 4.6: Net income

Operating cash flow

Figure 4.7: Operating cash flow

Shareholder's equity

Figure 4.8: Shareholder’s equity

4.4 Investment decision5

Investment decision made by a fundamental analysis-based algorithm for listed companies

Figure 4.9: Investment decision made by a fundamental analysis-based algorithm for listed companies


Town, D., & Town, P. (2018). Invested: How warren buffett and charlie munger taught me to master my mind, my emotions, and my money (with a little help from my dad). William Morrow, an imprint of HarperCollinsPublishers.

  1. Data are automatically retrieved from Google Finance and Yahoo Finance.↩︎

  2. The decision is made by analyzing only numerical data, which do not represent the value of a business as a whole. For example, the value of an early-stage company with zero or negative earnings cannot be determined based on numbers but should be assessed based on its mission, technology, management, and culture as well as the state of the industry overall.↩︎