The investment checklist helps you with a quick check of the stock's health. Stocks are evaluated on 8 different parameters like intrinsic value, dividend returns, default probability etc.

Below you can see the details of different parameters a stock is evaluated against.

  1. Intrinsic value - Intrinsic value is the calculated value of the stock and may differ from the current price of the stock. If intrinsic value > current price then price increase is expected in the near future and vice versa. We use market approach with top down market analysis to come up with the intrinsic value that is compared against the current price of stock.
  2. ROE vs FD rates - Stock's long term ROE (return on equity) is compared against FD rates for the same time. ROE is a measure of how efficiently the company is managing the funds invested by the shareholders. If a stock's long term average ROE is lower than the FD rates then it's better for investors to invest in FD rates than on the particular stock.
  3. Dividend returns - A dividend is the distribution of reward from a portion of a company's earnings that is paid to its shareholders. A good dividend return indicates good heath and outlook for the company.
  4. Entry points - It's an indicator of whether it's a good time to buy the stock or not. If the stock is overbought its price might be pushed to a higher level which might not be justified. 
  5. Red flags - This tells us whether the stock is added to ASM/GSM lists of NSE/BSE or if too much of the promoter holding is pledged. Any of this can be a red flag for the stock. Pledging holdings means taking loans against held promoter shares. Stocks in ASM/GSM lists or too much of promoter holdings should be handled with caution.
  6. Default probability - Default probability assesses a company's default risk using a combination of ratios, equity market's view of market risk and by analysing news, corporate filings regarding the financial health. It can range from 1 to 100% and signifies the probability of a company defaulting in next 12 months. The higher the score, higher are the company's chances of defaulting.
  7. Quality checks Quality investing involves selecting stocks based on specific exceptional quality characteristics such as management effectiveness, financial strength etc. The proprietary quality score is computed for companies with market-cap rank <700. Score calculation utilises fundamental data items such as leverage ratio and return on equity etc, as well as qualitative items like business stability.
  8. Growth score - A company that is able to generate significant top line and bottom line growth along with positive earnings is considered a growth company. Such companies also tend to have very profitable reinvestment opportunities and usually retain all their profits and do not pay dividends. The proprietary growth score is computed for companies with market-cap rank <700.

First 5 checklist parameters are free for all users while the Default probability, Quality checks and Growth score are accessible for the pro users only.