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Buffettology-esque Sustainable Growth Screen 12 Qualifying in UK

This screen seeks to replicate the approach of Warren Buffett,  arguably the most successful living investor - based on the summary/interpretation by Mary Buffett (a former daughter-in-law) in the best-selling book, "The New Buffettology".  In Chapter 13, Mary Buffett outlines a number of screening-type criteria entitled "Warren's Checklist for Potential Investments: His Ten Points of Light", which we summarise out below. Not all of these points are quantitative in nature, admittedly, but there's certainly the beginnings of a good Buffett screen, and one with a slightly different emphasis to that of the Buffett-Hagstrom screen. This version uses the Sustainable Growth method to calculate the "expected return". To learn more about this strategy please click here »

Picture of Warren Buffett

About Warren Buffett

The world's most famous living investor, chairman and CEO of Berkshire Hathaway

The New Buffettology

by Mary Buffett, David Clark, Mary Buffet

The original book, "Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett the World's Most Famous Investor", was published in 1997  - a more recent edition, "The New Buffetology" was released in 2002. We are not aware of any backtesting for this screen. 

This screen is based on a UK dataset. It uses the following criteria:

  • EPS Gwth Streak > 4
  • ROE % 5y Avg > 15
  • ROCE % 5y Avg > 12
  • FCF > 0
  • Long Term Debt < 5 * Net Income before Extraords
  • % 5y Price Chg > 0
  • NAV PS 5y CAGR % > 0
  • Earnings Yield % Last Yr > 3
  • Exp. Return (Sust Gwth) > 15

Results are sorted by:

  • Exp. Return (Sust Gwth) in descending order


And limited to the first 200 Results


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Buffettology-esque Sustainable Growth Screen Graphical History

Returns

Timeframe Screen Returns FTSE 100 Outperformance
1 week -1.70% 1.44% -3.1%
1 month -1.49% 6.08% -7.6%
3 months 2.10% 5.68% -3.6%
6 months 14.35% 19.31% -5.0%
1 year 15.08% 23.73% -8.7%
Since inception 29.61% 25.3% 4.3%
Annualised 19.97%

Risk

Maximum Drawdown-10.19%
Average No. of Holdings17.2
Diversification LevelGood

 Chart based on an equal weighted portfolio of max 25 stocks rebalanced quarterly. Qualifying shares below updated daily. Past performance not indicative of future returns.


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12 Qualifying in

Ticker Name Mkt Cap £m EPS Gwth Streak ROE % 5y Avg ROCE % 5y Avg FCF Long Term Debt Net Income before Extraords % 5y Price Chg NAV PS 5y CAGR % Earnings Yield % Last Yr Exp. Return (Sust Gwth)
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Can't see the share you expect? View this screen as a checklist to find out why.

You should consider the results of any screening process, including this one, as candidates for further research, not as a buy list. Screening helps to narrow a search based on pre-defined criteria. It is not a substitute for independent research reflecting your individual criteria for investing/trading. Please note that the screening criteria used represents Stockopedia's interpretation of the author's investment approach and are not determined or endorsed by the original strategist.