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Dr. Vijay Malik has earned the respect and admiration of informed investors across the country and in this video, I shall examine one of his many articles which is titled ""Final Checklist for Buying Stocks". Understandably, this checklist is designed to help investors pick stocks more efficiently and it comprises four major categories encompassing financial metrics, business parameters, valuation indicators, and management analysis. We'll explore every metric within these categories and apply them to a screener with the goal of narrowing down a list of over 4,000 stocks to just 10 potential long-term investment opportunities.
👉 Final Checklist for Buying Stocks (article by Dr. Vijay Malik): https://www.drvijaymalik.com/stocks-buying-checklist/
👉 You can access the screener here: https://www.screener.in/screens/1164624/dr-vijay-maliks-screener-by-shankar-nath/
Category 1 : Financial Metrics
a) Sales Growth: Dr. Malik prefers consistent sales growth of at least 15% over 7 to 10 years
b) Profitability: A net profit margin of at least 8% is a requirement
c) Tax Payout: The tax rate should be close to the corporate tax rate, around 25%
d) Interest Coverage: It should be at least 3, indicating the company's ability to service its debt
e) Debt-to-Equity Ratio: Less than 0.5 is considered ideal
f) Current Ratio: It should be at least 1.25, demonstrating the ability to cover short-term liabilities
g) Positive Cash Flow: The company should consistently generate positive cash flow from operations
h) Profit-Cash Flow Alignment: There should be no more than a 20% deviation between operational cash flows and net profits
Category 2 : Business Parameters
a) Sales Growth Relative to Peers: Dr. Malik looks for companies with sales growth higher than their competitors
b) Production Capacity and Sales Volume: The company should demonstrate an increase in production capacity and sales volume
c) Conversion of Sales Growth into Profit Growth: Sales and profit growth should be in alignment.
d) Conversion of Profits into Cash: Profits and cash flows from operations should be close
e) Creation of Shareholder Value: The company's market cap growth should surpass the increase in retained earnings over the last 10 years
Category 3 : Management Analysis
a) Background Check: Examine the backgrounds of the company's promoters and directors
b) Management Succession Plan: Assess the fairness and capability of the succession plan
c) Promoter's Salary: Ensure the promoter's salary doesn't rise disproportionately to profits
d) Project Execution Skills: Evaluate the company's track record in project execution
e) Dividend Increase: Dividends should have consistently increased over time
f) Promoter Shareholding: High promoter shareholding is favorable, ideally at least 51%
g) Insider Buying: Check if promoters are buying more shares
h) Foreign Institutional Shareholding (FII): Lower FII shareholding is preferred, typically less than 20%
Category 4 : Valuation Indicators
a) PE Ratio: Historical and industry PE comparisons
b) PEG Ratio: Below 1 indicates undervaluation
c) Earnings Yield: Higher than the 10-year government bond yield (currently 7.17%)
d) PB Ratio: Ideally less than 1 (none in our shortlist)
e) Price-to-Sales Ratio: Below 1.5 for buying, above 3 for selling
f) Dividend Yield: Desirable at 5%, but not critical for fast-growing companies
In conclusion, Dr. Vijay Malik's checklist provides an excellent framework for identifying potential long-term stock investments. With rigorous analysis across various parameters, it empowers investors to make informed decisions. Explore the metrics, conduct your research, and stay tuned for more investment insights.
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👉 Video Chapters:
00:00 Dr. Vijay Malik and the Art of Peaceful Investing
01:22 Financial Analysis
05:27 Business and Operational Analysis
08:21 Management Analysis
09:22 Valuation Analysis
11:17 Shankar's Viewpoint
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#stockpicking #longterminvesting #fundamentalanalysis #valuation #screener
Disclaimer: I am not a SEBI registered investment advisor or research analyst. I am not registered with PFRDA or IRDA either. The content posted on this platform is purely for educational purposes and none of it constitutes investing or trading advice. Viewers should do their own research and diligence before investing or acting on the information presented. Some of the links I have posted in the video, the description, the comments and other related resources might be affiliate links
@shankarnath7 months agoThe screener covering the financial analysis part of this checklist can be accessed at If you prefer text, I've also summarized every category and metric in the video's description ...8
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@parvshukla36487 months agoAnd if you aren't impressed then book an appointment with a good doctor and get yourself checked off was epic 😂🔥 8
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@RajeshKumar-ut3mu7 months agoDr.Vijay Malik is an underrated investment teacher..Thanks Shankar Sir for this amazing video..🎉keep doing great work. 15
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@epicenteryt7 months agoHe is teacher for every one of us out there. I just wonder how has he gathered that kind of practical information 1
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@santhoshkumar9957 months agoThe quality of work you have put in is immense. Highly appreciate your commitment to share such quality work for free to the community. I also had to watch it twice to fully understand it and take notes. 6
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@naveenkumarsharma27167 months agoExcellent presentation and explanation to filter value companies 👏👏👏👏 1
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@PiyushSharma-mo9qo7 months agothis screener thing is the best youre doing soo far shankar ji.... may god bless u with the best of health ,wealth and knowledge 4
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@rajharshtiwari24125 months agolike i say always this channel is a gem
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@baibhavRishu7 months agoSir, make more videos on these kinds of investors teaching (it's amazing as always) 4
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@vinobooks7 months agoSuch a resourceful video, thank you sir!! 1
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@shantilal0077 months agoThanks for another such wonderful learning video, Appreciated for bringing this to all the viewers. 1
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@Avi-Bhatta7 months agoGood video. Such a stringent Debt to Equity would take out all Banking & NBFC stocks, possibly. 2
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@rajiw9377 months agoShankar u r doing great job bro. Dr vijay malik is also one of the gem of investment fraternity. 1
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@naveenpolasu46707 months agoYou are doing very good job. This is really useful. 1
@rb86077 months agoThanks for sharing screener.. please keep sharing whenever feasible for future videos..
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@ramkumargopalan807 months agofabulous insights & details helping me to learn better :) 1
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@mozo1997 months agoGreat video, I'm loving the intros. 1
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@jayadevtn19877 months agoI watched this now probably 3rd time to get understanding of it. Thank you sir
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@eskay19597 months agoI have already read about this checklist. But, your way of presentation is simply outstanding. Thanks for the video 1
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@akhaleefa7 months agoYou are one of the best. Thanks for yr efforts. Wish you are able to find a company like Wipro which allowed investors who invested 40 years back to be very rich people. 1
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@ManasGhosh_7 months agoThanks very much for the explanation. The ticks at seem to be a bit off, especially for PS ratio. Should not the ticks be at Sharda, Sree Raya instead of Indigo and Fineotex? For earnings yield, it should be at Sree Raya instead of Fineotex. Or, Have I misunderstood something? ...1
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@user-qh6eo6pr3p7 months agoHi Shankar, Wonderful presentation as always. Is it possible to backtest the portfolio created using this checklist over the past decade and check if it can beat the benchmark indices consistently? It would be very interesting to know the results. Maybe another follow up episode on this? ...1
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@drkeval7 months agoPlz do make a video on fundamental analysis of QSR sector and stocks inside that sector
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@amol54746 months agoNice T shirt sirjee and also thanks for sharing nice content
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@nandi99667 months agoHave you made any videos on Investing in US Stocks using INDMoney? TCS will be applicable from 1st of September and I am planning to invest in US Stocks. Can you please share the insights?
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@cgirish19887 months agoThanks for another Insightful video Shankar ji. I was wondering do you have any thoughts as to why Dr Malik insisted a rule like Low FII investment in the checklist
@gauravkhandelwal15757 months agoHi Shankar nath, Could you please suggest/make a video on good SWP funds ? PURPOSE - Anyone looking to put big lumpsum amount for 4 years in that fund and then start a SWP
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@devadossvanaja7 months agoShankar ! you talk very fast ...I ( 75+) find it a lil difficult ...is it possible to get a pdf transcription of them for people like me ? Sorry for the embarrassment 😀 1
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@80Vikram7 months agoYour YT channel is gold mine, thanks a ton for your efforts. God bless you. You should as well start your own blog as well. May be you should start reviewing all the main finance related books and their learnings for younger generations to come, starting with "Rich Dad, Poor Dad". ...
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@shyamsmenon7 months agoThank you for the video. A little too stringent a list to be of practical use. In the financial checklist, a low profit margin cannot exclude companies of the asset turns are high as a Du Pont analysis of ROE points out. The points covered are all good but the key lies in tying the relevant metric to the companies within a sector. BTW a good video to have would be the key performance indicators for companies in each sector. ...
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@logeshwarans55377 months agoSir if my family member apply IPO can they use my UPI account for applying mandate ?? Iam Asking because they wont be maintaining amount in their bank account
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@IzaanRM7 months agoVery underated youtube..before these year will 500k sure...😂😂..so invest before reach 500k ..now looks penny
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@manoj.tyg017 months agoThanks shankar this is really a good insight ..you are going to be next Vijay Malik and May be better than him .. keep doing the good work ❤ 1
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@saikatsengupta9097 months agoDr Malik's analysis digs too deep into financials(that are always past performance) and management(which is very difficult to assess for small investors). A more balance approach with an eye on market cap, present price strength compared to Index and past price performance(volatility), in my opinion, will give a better risk adjusted portfolio. Also assessing long term growth prospects of a business(specially if you are a long term investor) is very important before investing. ...1
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@pisaimugundh61247 months agoThanks for another insightful video your videos are so informative that I need to pause multiple times, rewind back few times to understand it completely Excellent efforts by you and your team 👏👏👏👏👏 ps: didn't expect thalapathy vijay in the initial list😜 ...
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@mozo1997 months agoThe last item in the checklist is 10 year cfo vs 10 year pat not last year.
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@venki4937 months agoWhy sree rayalasaeema stock is eleminated from the list in just 2 weeks time. Can you explain is there any big change of search metric in just 2 weeks.
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@vinodgarg99377 months agoAccording to this video Dr Malik cannot invest in stock market 2
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@onlinevieweranon7 months agoIt is interesting how even the best of best companies (filtered as per Dr Malik's framework) makes margins lesser than 20% (NPM) while government grabs better margins through taxes that exceed 20-25%
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@adityakapoor0017 months agoI have created a custom ratio OCPAT5 which is ratio of operating cashflow to pat for last 5 years and OCPAT10 for last years. If this is less that 0.8, the company is eliminated
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@whatsup35197 months agoInvesting and running a declining business to success required different skill set. Or is that both part of a coin. Expecting your reply
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@sidcoolguy77 months agohis track record isn't as impressive as you may think..
Related videos for Dr. Vijay Malik's Checklist for Finding Winning Stocks | Best Investment Picks on a Stock Screener:
If you prefer text, I've also summarized every category and metric in the video's description ... 8
was epic 😂🔥 8
Is it possible to backtest the portfolio created using this checklist over the past decade and check if it can beat the benchmark indices consistently? It would be very interesting to know the results. Maybe another follow up episode on this? ... 1
Could you please suggest/make a video on good SWP funds ?
PURPOSE - Anyone looking to put big lumpsum amount for 4 years in that fund and then start a SWP
your videos are so informative that I need to pause multiple times, rewind back few times to understand it completely
Excellent efforts by you and your team 👏👏👏👏👏
ps: didn't expect thalapathy vijay in the initial list😜 ...