Basant, you know these 11 stocks better than anybody else. It would be interesting to know your ranking of these 11 stocks based on your parameters (including subjective factors like management pedigree & future prospects) at current market prices.  If it almost matches this quantitative mathematical model, then it would be amazing.

 

Your ranking should come out AFTER I'm done with the final 2 rounds (P/BV & Debt/Equity) though!

 

Try working with the RoE (1- payout ratio)

Does PEG needs to be included

 

I don't think they matter much - because we are already considering RoE, div payout ratio, PE and growth rates.

 

This analysis apears to assume an equal weight on all the parameters considered . May I suggest we assign different weightage & see what a weighted sum throws up

 

Interesting thought. I think this quantitative model is flexible enough to accomodate that because of simplicity of assigning points (descending order) and simplicity of final ranking (just adding up the scores).

 

Now let's say your portfolio does NOT have any asset rich companies (like manufacturing, power or chemicals) or financials. Then you don't need to care much about the stock's P/BV ratio. So if you want to, you can half the weightage of P/BV and assign 5.5 points for the stock with the highest P/BV and 0.5 to the one with the lowest. Or you can do away with P/BV compeletely.

 

And if you want to stress more on P/E, you can assign twice the weightage to it (22 points for lowest P/E and 2 points for the highest).

 

However, I do not recommend that - I recommend equal weightage. Remember that here, we are comparing stocks on various parameters across different sectors. We could be comparing the RoE of a financial stock with the RoE of a FMCG company. But in the end, the process of simple addition of scores cancels all these anomalies - in my opinion.

 

 

 

 

Hawkins is recession proof business due to its simple product of core necessity. Its true that if sensex crahes due to any external factor then Hawkins would be thrashed too in tendem. But recovery will be definitly fast and outstanding, such collapse often leds to cheap availability of RM and since demand for Hawkins is generic so with same growth rate Hawkins gives outstanding results in down time and it will sure lead to fast restoration of stock price.