Terry Smith Portfolio Metrics To Find Quality Stocks
Finding Quality Stocks Using Terry Smith Portfolio Metrics
Terry Smith: Quality at fair price
RUN IN STOCK SCREENER
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A screener inspired by the work of Terry Smith, founder of Fundsmith. The screen finds quality companies while also taking into account a fair pricing. The output is meant to be investigated deeper for long term buy and hold.
Long
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Stock Screener Settings
GM>=55%
A gross margin of at least 55%
OM>=20%
An operating margin of at least 20%
FCF growth 5Y>=0%
In the last 5 years the Free Cash Flow has grown
Debt/FCF<=5
The debt is less than 5 times the Free Cash Flow
Cash Conversion>=90%
At least 90% of EBITDA is converted into cash flow
GICS: Industrials, Consumer Discretionary, Consumer Staples, Health Care, Information Technology, Communication Services, Utilities
Exclude low profitability industries
ROCE(5y)>=15%
A 5 year average ROCE of at least 15%
Market Cap: At least Small (300M+)
Avoid very small caps
Interest Converage>=10
The interest coverage is least 10
P/FCF<=30
An fcf yield of at least 3.33%
Chart Settings
Long term chart
Regional Run
Run this screen in your favorite region. You can always further fine tune the screen by changing the general settings after it opened in the screener.