No. of Recommendations: 1
Hey Fools,

I recently rolled out version 2.0 of my homegrown checklist. You can read more about the changes here: http://boards.fool.com/brian39s-quality-checklist-version-20...

Here's my attempt to rank ADSK


Metric (score potential) ADSK

Financial:

Financial Resilience:(0 - 5) 3
Gross Margin: (<50%, 50% to 80%, >80%) (0 - 3) 3
Returns On Capital: (Low, Average, Rising)(0 - 3) 1
FCF: (Negative / Positive / Positive and growing fast) (0 - 3) 1
EPS: (Negative / Positive / Positive and growing fast) (0 - 3) 1

Moat:
Network effect (None / Weak / Strong) (0 - 15)
Switching costs (None / Weak / Strong) (0 - 15) 15
Durable Cost Advantage:(0 - 15)
Intangibles: (0 - 15)
Moat Direction: (Narrowing / Stable / Widening) (0 - 5) 3

Potential:
Optionality:(0 - 7) 4
Organic Growth Runway: (G.D.P. / 2x or 3x G.D.P. / 15%+) (0 - 4) 4
Top dog And/Or Industry Disruptor:(0 - 3) 2
Operating Leverage Ahead?(0 - 4) 4

Customers:
Acquisition:(0 - 5) 3
Dependence: (0 - 5) 4

Company-specific factors:
Recurring Revenue: (None / Some / Tons) (0 - 5) 5
Pricing Power: (None / Inflation / Tons) (0 - 5) 5

Management & Culture:
Soul in the game: (Founder/Family Run/Long Tenured CEO) (0 - 4) 3
Inside ownership: (None / Modest / Very High) (0 - 3) 0
Glassdoor ratings: (0 - 4) 1
Mission statement? (Simple, Inspirational, Optional-able) (0 - 3) 3

Stock:
Performance Vs. S&P 500:(0 - 4) 4
Shareholder Friendly Actions:(0 - 3) 2
Consistently Beats Expectations?(0 - 4) 4

Pre Gauntlet Score: 75 (very good)

The Gauntlet

Customer Concentration:(-5 , -3, 0) 0
Industry Disruption:(-5, -3, 0) 0
Outside Forces:(-5, -3, 0) 0
Big Market Loser: (-5, -3, 0) 0
Binary Event: (-5, 0) 0
Extreme Dilution: (-4, -2, 0) 0
Growth By Acquisition: (-4, -2, 0) 0
Complicated Financials (-3, 0) 0
Antitrust Concerns: (-3, 0) 0
Political Risk: (-3, -2, 0) 0
Currency Risk:(-2, -1, 0) 0

Final score: 75


For perspective, the highest score possible is a 100, and the lowest score possible is -44.

Any score over 70 gets me interested so Autodesk's score of 75 makes it a great stock to consider.

Brian

*******
FAQ:

Is there a spreadsheet that has all of your data?
Yes, but I do not want to make it publicly available. I will post on a company by company basis to the boards. Feel free to follow me if you want to see my most recent rankings.

What company got the highest score so far?Alphabet (86) and Paycom Software (86)

What data do you have to show that this methodology works? Very little. This project was started a few months ago. I'm currently thinking through ways to measure its long-term effectiveness, but my gut feeling tells me that it will help me pick better stocks.

What about valuation? This data is only designed to help me determine business quality, which is far more important than valuation. However, whenever I personally make buy/hold/sell decisions, I always consider valuation too.
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.