INDUSTRY AND PRODUCT
A Defendable Niche. Does the company have a sustainable competitive advantage?
Strong 3 to 5+ years earnings, above average Return on Shareholders Equity, substantial profit margins.
Modest capital spending needs. How much does the company have to spend to maintain current operations? Freedom to adjust prices for inflation.
Effective management. How good are they at expanding operations, reinvesting in future growth opportunities, making smart acquisitions, or repurchasing shares?
Low debt levels. Abundant free cash flow.
Attractive financial ratios. Relative to peers, the market, and historic ratios.