Twice a year, I combine Warren Buffett’s and Ben Graham’s criteria for choosing stocks for a special feature in Cabot Benjamin Graham Value Letter, the publication I edit. To find investment opportunities for you, I looked for stocks with: 1) Free cash flow of more than $20 million – cash needs include dividends, operating expenses, capital improvements and research. 2) Net profit margin more than 15% – a good indicator of growth sustainability. 3) Return on equity more than 15% – a barometer of future appreciation. 4) Discounted cash flow value higher than current price – Standard & Poor’s...
