1. Profitability Metrics I Focus On

Profitability is the first requirement. If a company cannot generate solid returns on capital, I simply move on.

Return on Capital (ROC)

• Definition: Profit per unit of invested capital
• Why it matters: It shows how efficiently a company uses its capital
• My requirement: Above 8%

Notes:

• Values above 10% are excellent
• Proprietary calculation based on current data and 5-year estimates
• Very useful for comparing both growing and stable companies

Estimated Return on Capital (EROC)

• Definition: Estimated ROC
• Why it matters: If ROC ≈ EROC, earnings are likely stable. This is one of the best metrics to identify profitable growth
• My requirement: Above 15% is excellent

Revenue Growth (1–5 Years)

• Metric: Revenue Growth over the last 1–5 years
• My requirement: Above 10%

Growing revenues are essential for long-term value creation.

2. Stability and Financial Strength

After profitability, I focus on balance sheet strength and business robustness.

Debt per Share to Price

• Definition: Debt per share divided by stock price
• My requirement: Below 10%

Lower values indicate a healthier capital structure.

Debt per Share to Margin Mean Revenues

• Definition: Indicates how many years the company needs to repay its debt using average revenues
• My requirement: Below 5 years

Note: Sometimes this metric shows 999, which is a default value when the calculation is not possible.

Number of Employees (EMP)

• Why it matters: It gives an idea of operational scale
• My requirement: At least 200 employees

Company Class

The company must be classified as Class A or B

This classification is based on a proprietary algorithm that evaluates both debt and profitability.

3. Business Quality Assessment

Once a company passes the quantitative filters, I move to a qualitative analysis.

I visit the company's website and ask myself a simple question: "Does this business inspire confidence, and can it realistically exist and grow for many years?"

This step is crucial.

• If the website is not accessible from Italy, it's an immediate no.
• If the website talks only about the stock price and financial performance without clearly explaining what the company actually does, it's also a hard no.
• If I don't understand the business, I don't invest.

4. Fundamental Analysis

Next, I analyze the fundamentals directly in Occulus (by clicking near the Symbol).

Here I focus mainly on:

• Growing revenues
• Solid earnings
• Stable or decreasing share count

I strongly dislike shareholder dilution. If the number of shares keeps increasing, it's a negative signal for me.

5. Market Sentiment and Technical Analysis

After fundamentals, I evaluate market sentiment using technical analysis (again via the Symbol).

What I look for:

• A retracement of at least 40% from the highs

This helps me avoid buying at overly optimistic market phases and improves my margin of safety.

6. Time to Buy

If a company passes:

• Profitability checks
• Stability filters
• Business quality assessment
• Fundamental analysis
• Market sentiment evaluation

then, and only then, it's time to buy.

Final Thoughts

Occulus doesn't make decisions for me, but it allows me to focus my attention only on companies that truly deserve deeper analysis.

This disciplined and repeatable process helps me stay rational, avoid noise, and invest with confidence.