How To Pick Quality Shares: A three-step process for selecting profitable stocks

Straight to the point

Phil has set out the concepts in a logical sequential manner. Though it is possible to work through the book without any company accounting knowledge, I would suggest a basic understanding of the Balance Sheet, Income Statement and Cash Statement would be helpful. Phil explains the various accounting terms and accounting ratios, nonetheless.Another suggestion from past experience in reading books like this: I kept a log of all Phil's suggestions e.g. Lease Adjusted ROCE ~ >15% over a 10 year period; Capex Ratio <= 30%.; Fixed Charge Cover < 1.3X might suggest a financially distressed company.Secondly, all Phil's worked examples I set out in EXCEL spreadsheets especially the last set for valuing shares and establishing the maximum price: (a) It helped me understand and (b) I could experiment by altering various elements of the calculation to see the effect(s).I subscribe to SharePad and it has been useful to have the book in one hand and SharePad open on the share being discussed usually Domino's Pizza!Highly recommend the book compared with other such books I have read on share investment which tend to blind the reader with how clever the author is at share investment.

As the summary says, the book addresses identifying a good quality company, analysing it accounts, and valuing the shares..The coverage of the first two is excellent. You need a basic understanding of company accounts; and then the book explains clearly various tests for analysis..When it comes to valuation, I found the book less sound: it suggests tests, but then concludes that many shares will be identified as too highly priced..The underlying style being advocated can be summarised as 'Buy Quality Growth shares, at a Reasonable Price..In my view this book will help you to find the 'Quality Growth' shares; but then - I suggest - it is better to use Technical Analysis to identify the right time to buy..

If you are not familiar with Phil Oakley you can can get a sample of his writing in free articles written for SharePad.Phil is a teacher at heart, not only has he an analysts knowledge but he has the rare ability to explain a topic in an interesting understandable way.How to pick quality shares goes through publicly available information mainly the annual reports and takes you through the income, Balance sheet and cash flow statements.You are shown the important ratios and how to calculate them from worked examples from company accounts.You are taken through debts particularly off balance sheet one like pension deficits and leases. The benefits and problems associated with each ratio are highlighted.Having read the book I refer to it regularly like one would an encyclopaedia to reread something when I’m selecting a share.How to Pick Quality Shares is now my most important book on this subject and I only wish this was available 40 years ago.

This book cuts out the fat and breaks down exactly how to pick winning company stocks in three simple steps. 1. Look for companies with growing profits, turnover, and healthy cash flows. 2. Avoid risky companies with a lot of debt 3. Don’t pay too much for a share. A series of company data and ratios enables this to be possible. The book provides case studies and examples that are easy to follow and I was able to build my own spreadsheet model to analyse and pick the best of the best.Worth every penny.

This is a very informative book on a subject that most of us know little about. It is presented in a very logical and straightforward manner and although some degree of investigation is required, after this you will never ever be confused by Financial terminology nor by the intricacies of a company's accounts. This book will certainly enable anyone to delve into various companies that are of investment interest and arrive at a decision as to whether they are a good, bad or indifferent company and whether to invest in them. You probably wont get rich quick with this strategy but you will be able to make solid and long-lasting investments. Top notch.