The 52-Week Low Formula book

Recently read The 52-Week Low Formula book below are filters, will go through companies if any pass.

Filter 1: Durable competitive advantage 

Achieved a consistent ROIC in excess of its COC over a 10-year period

Filter 2: Free Cash Flow Yield twice that of 10-year GSEC.

Operating Cash Flow − Capital Costs of Maintaining Current Capacity = Free Cash Flow

Market Capitalization + Debt − Cash = Enterprise Value 

And free cash flow yield: Free Cash Flow/ Enterprise Value = Free Cash Flow Yield

Filter 3: ROIC of 15% is a good start

ROIC > COC = Passes the third filter and moves on to filter 4. 

ROIC < COC = Fails the third filter and is disregarded.

Net Operating Profit after Taxes (NOPAT)/ Invested Capital (IC) = ROIC

NOPAT = (Operating Profit) × (1 − Tax Rate)

IC = (Total Assets) − (Excess Cash)  − (Non-Interest-Bearing Current Liabilities)

Filter 4: Total Long-Term Debt)/Free Cash Flow <= 3

Filter 5: 52-Week Low (near to 10% of 52-Week low will do)