Walter Schloss-

Efficient companies generating profits and free cash. To be called a 'super investor' by none other than Warren Buffett himself is no mean feat. Walter Schloss, a follower of Ben Graham's value investing approach, is known to look for bargain stocks that traded at huge discounts to there their value. Over a 50-year span, this super investor earned gross returns averaging 20 per cent annually. We applied Walter's principles and refined them a little to match today's time and looked for stocks. We looked for stocks trading at discount to book value. Next, he preferred companies that had no or very low debt. We included companies that had financial history of at least 10 years with net profits compounding more that 10 per cent during the same time. Walter Schloss also preferred companies that were able to produce positive cash flows, that's why we included companies that delivered positive cash flows from operations over the past five years. Finally, he preferred companies with depressed stock prices, which is why we sifted through stocks that have current PE at more than 50 per cent discount to their five-year median PE.

by Puchandy