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   Jahapanah Basant Maharaj has created TheEquityDesk XI, a set of 11 stocks which has the potential to grow at a good pace over a period of time. My analysis is an attempt to rank the 11 stocks and help an investor decide which among the lot is the best and the worst stock to invest at the current market prices.
Basically, this is a quantitative analysis of a set of stocks, based purely on their fundamentals. I'm only using the TED XI as an example - this methodology can be used on any portfolio to determine the best and the worst.

All the 11 stocks will be analysed based on -
P/E Ratio
Return on Equity
Last 4 years CAGR Sales Growth
Last 4 Years CAGR Profit Growth
Market Cap
P/BV Ratio
Debt to Equity Ratio
Dividend Yield
Last 4 Years CAGR dividend per share growth
Dividend Payout Ratio
Basically, we will be looking at parameters typically used by both "growth" and "value" investors.
Ranking Methodology:
- All the 11 stocks are ranked based on each parameter - say P/E Ratio to begin with. A stock with the lowest P/E Ratio gets the highest 11 points, while a stock with the highest P/E Ratio gets the lowest 1 point.
- Similarly, for other parameters like RoE, marketcap etc, each stock is awarded between 1 points and 11 points depending on where it stands compared to eachother.
- The scores are added at the end, and the stocks are ranked from 1 to 11.
Might not make much sense now, but as we go along, you'll know what I mean.
Flaw in the Methodology:
Looks into the past rather than the future to rank the stocks.

ROUND NUMBER 1 - THE P/E RATIO
Obviously, lower the P/E ratio, the better. Since there are 11 stocks in the portfolio, the stock with the lowest P/E Ratio gets 11 points while the stock with the highest P/E ratio gets 1 point.

Company Name
P/E Ratio
Points Earned

Voltamp Transformers
11.67
11

Hawkins Cookers 
13.57
10

Voltas
19.29
9

Blue Star 
19.94
8

Yes Bank
20.46
7

Page Industries 
28.94
6

HDFC
29.56
5

HDFC Bank
30.41
4

Zydus Wellness 
40.23
3

Titan Industries 
43.12
2

Thermax
55.12
1

Voltamp is the cheapest stock of the lot and hence gets rewarded with the maximum 11 points. Meanwhile, Thermax had a loss making quarter recently, and hence its P/E is extremely high. It is appropriately penalized with just 1 point awarded to it in this round. The rest of the stocks get 10, 9, 8 etc points in descending order based on their current P/E.

ROUND NO. 2 - RETURN ON EQUITY

Higher the RoE, better is the stock for investment. The stock with the highest RoE gets 11 points and the stock with the lowest RoE gets 1 point in this round.

Company Name
RoE
Points Earned

Hawkins Cookers 
94.68
11

Zydus Wellness 
45
10

Blue Star 
43.01
9

Page Industries 
39.99
8

Voltas
34.58
7

Titan Industries 
34.55
6

Voltamp Transformers
24.82
5

HDFC
18.59
4

Yes Bank
15.46
3

HDFC Bank
13.7
2

Thermax
13.46
1

To find out the stock with the best combination of low P/E and high RoE, we add the points earned by each stock in the P/E round and the RoE round.

Company Name
RoE (Pts)
P/E (Pts)
Total Pts

Hawkins Cookers 
11
10
21

Blue Star 
9
8
17

Voltamp Transformers
5
11
16

Voltas
7
9
16

Page Industries 
8
6
14

Zydus Wellness 
10
3
13

Yes Bank
3
7
10

HDFC
4
5
9

Titan Industries 
6
2
8

HDFC Bank
2
4
6

Thermax
1
1
2

Ranking of stocks with the best combination of low P/E & high RoE -

Company Name
Ranking

Hawkins Cookers 
1

Blue Star 
2

Voltamp Transformers
3

Voltas
4

Page Industries 
5

Zydus Wellness 
6

Yes Bank
7

HDFC
8

Titan Industries 
9

HDFC Bank
10

Thermax
11

For now, the best stock to buy is Hawkins and the worst to own now is Thermax. But the contest is not over yet. We add the scores earned by each stock in market cap, sales growth, profit growth, debt equity ratio and other rounds. 

Coming up next - Round No. 3 - the Marketcap round.

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