We use a companies financial reports to analyse the numbers of their business and their financial health – this takes place every 3 months for U.S. stocks and every 6 months for Australian stocks. It allows us to rule out around three-quarters of the market, so we can focus on the financially healthy stocks. It is here we find the best of the blue chips as well as the small-to-mid caps that others miss.
Financially healthy stocks
History of profitability
It’s not enough for a healthy company to simply grow or provide strong dividends. Its numbers must show it can do it efficiently, with good margins, strong growth metrics and/or sustainable dividends over time.
Consistent growth metrics, solid margins, and/or sustainable dividends
Quantitative analysis of past performance and financial health does an excellent job at reducing our focus from over 2,000 stocks listed on the Australian stock exchange, down to the 200 or so that have exceptional financials. From there our team of analysts apply a final set of qualitative overlays to complete our assessment. The team looks at everything from the competitive landscape, experience of senior leaders, short-selling trends to Director remuneration and ‘skin in the game.’
Our Financial Health Model has a 94%+ accuracy in predicting corporate failures in both Australia and the U.S.
The stocks we select for our Stock Doctor members and construct our Managed Funds from are made up exclusively of our Star Stocks. They are the best of the blue chips and the most dynamic of small caps. Flying under the radar and often yet to be discovered by most market participants. Exclusive to members and investors Stock Doctor Star Stocks have been delivering strong returns since 1996.
To discuss the future of your investments in detail, book in a free consultation with a Lincoln representative.
To discuss the future of your investments in detail, book in a free consultation with a Lincoln financial expert.