Guru Screener: Warren Buffet Consistent Compounders

Example number 7: Warren Buffet’s Consistent Compounders

Category: Guru Screeners

Probably a role model for every investor ever– Warren Buffet is someone we all admire and aspire to be, right? 

Now we can’t model him completely, but we’ve tried our best to create a screen using his best core philosophies. Let’s see how it fairs against the benchmark.

How to Build This Screen

We’ve used the following conditions to create it:

Search for ‘Score’ (after clicking on Add Rule), a box will appear like this,

In metric to score stocks, we have used Market Cap and kept the direction as ‘Higher the better’. We’ve selected stocks from all universe, you can change them as per your choice of strategy.

Other rules are Average ROE 3Y FY > 15,

SCORE (Free CF margin FY, by=Universe, direction=Higher the better) > 70 (just like Market Cap score you can set this, too),

AVERAGE (Free CF margin FY, by=Years, period=3) > 0(just like Market Cap score you can set this, too),

Net profit margin TTM > AVERAGE (Net profit margin TTM, by=Industry)(just like Market Cap score you can set this, too),

SCORE (PB Ratio, by=Universe, direction=Lower the better) > 50 (just like Market Cap score you can set this, too.)

The aim of using these rules is to pick quality companies with high ROE, and high profit margins that are generating free cash flow. It also applies a final value (P/B) sort to the companies.

Backtest Results

Let’s see how our screen fairs against the benchmark.

The results speak for itself. We have many such Guru Screeners available in our community screeners. You can check, try, and backtest them. 

Depending on your style of investing, you can clone, and play around with the rules to create your Guru-inspired screens!

Let’s see one more example of Guru Screener.