What’s your framework to do DIY stock picking?

1. Consistent growth in revenue, income, free cash flow past 5 years

2. Wide economic moat

3. Conservative debt (interest coverage >3, Debt/EBIDTA <3)

4. Efficient (high operating margin, ROE, Return on tangible assets compared to industry)

5. Honest and transparent management (read annual reports and shareholder letters)

6. Positive growth estimates

Only if I feel a business meets my criteria will I put them on my watchlist. Then, I will estimate it’s intrinsic value to me.

Overvalued: keep in watchlist

Fair/undervalued: look at technical charts for possible point of entry.

For positions that do not meet my criteria, are overvalued but have good technical chart patterns, doesn’t mean I’ll throw them away, I may consider them for trades.

I guess some things I look out for:

1. Growing market

2. Fast revenue growth

3. Good gross margins

4. Improving operating margins (not necessary at the start but eventually)

5. Good management (includes things like character, how they handle acquistions, and their decisions for the business)

6. Good liquidity is a big plus but not always necessary

I know it sounds vague, but that's because every industry and every company is different so it's hard to give a 1 size fit all solution to this question. Perhaps you can understand it better from my picks. Some of my recent picks have been $TDOC, $APPS and $SE.​​​