In the books he describes some criteria a defensive investor should look at before buying stock in a company:
I've tried to use Finviz.com to screen stocks on these criteria (I couldn't find them all though). See here. One example of a stock that seems like a good buy would be Aegon. Low P/E, very low P/B, good dividend yield.1. Adequate size of the enterprise
$100 annual sales (in 1970 money). Nowadays: 2 billion
2. Sufficiently strong financial condition
asses = 2x liabilities (don't count goodwill!). Long term debt < net current assets ('working capital')
3. Earning stability
earnings > 0 for 10 years
4. Dividend Record
Uninterrupted payments for at least the past 20 years
5. Earnings Growth
earnings per share growth of 33% in 10 years (3 year averages at start and end)
6. Moderate P/E ratio
P/E <= 15 as average on past 3 years
7. Moderate ratio of P/B ratio
Price < 1.5 book value last reported. OR: P/E times P/B < 22.5 (e.g. 15 * 1.5 = 22.5 so a-okay)
Now, my question is: what am I missing? I know that good next steps would be to read the annual reports of several years (and first some books about interpreting annual reports), are there any other steps you would take?
* Of course, I need to read and work at a lot more on this subject before I can actually can use it to buy stocks.