Dargan's 5-10-15 Rule for finding Great Investments
Mission Simple: Finding Amazing Companies
I am often asked how I look for wonderful or amazing companies. I have shared several criteria in the past. But continuing from my recent post, I like to keep things simple where I can.
Barry Dargan (Intermede Investment Partners) has a very simple 5-10-15 formula:
He says, "One tool we employ in our screening process to find winners is the ‘5-10-15’ rule: annual average growth of 5% in revenues, 10% in earnings per share, and 15% and rising return on equity (ROE) over previous 10 years. "
So there you have it, A very simple system to help you find amazing companies.
PS: The next criteria is to make sure you don't overpay for it. :)