New To IV and Value Investing - Would Like Your Feedback


Preston's presentation on IV in Course 2 really inspired me to try to write something that would run a daily or weekly screen that would produce possible investment leads based on Buffet's 4 rules.

Rule 1 - Vigilant Leadership : This is easy to quantify with Current Ratio and Debt to Equity.

Rule 2 - Long-term Prospects : This is difficult to quantify but might be doable if enough data is pulled together. For now consider this a do your own manual due diligence after the list of stocks is filtered down by Rules 1 and 4.

Rule 3 - Stable and Understand : Using slope to analyze historical data makes this pretty easy to quantify stable. Due Diligence is still needed here to determine if the business is understandable.

Rule 4 - Intrinsic Value Calculation : A very easy calculation to do once you screen down to less than 100 stocks.

So here are the steps the software performs:

1. Run as stock screener (I use Jaunt to scrape the data) based on the following values: ROE >= .15 | D/E < .5 | CR >= 1.5 | P/E > 0 | Div Yield >= .01 | Div Payout Ratio <= .7 (I know this is more than what Buffet probably uses but this fits my investment appetite better and gets the list of stocks down to < 100)

2. Evaluate Each Stock and Assign a Final Score:

- Perform the IV Calc on each stock
- Compare IV to Last Closing Price to see if the stock is undervalued
- Evaluate the follwoing historical values for consistency weighted by how many years of history we have :
Debt/Equity (score stocks higher that keep D/E below .5 consistently), Free Cash Flow per Share, Earning per Share, Book Value per Share.

3. Sort the stocks by an overall score we came up with in step 2.

I would like the community to look at the top 5-10 stocks and tell me why you would NOT buy them. What am I missing in the fundamental analysis that I should add.

The results can be found here:

Thanks in advance for you feedback.
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