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pattern of great business

Questions › Category: Stock Screening › pattern of great business
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Andy asked 3 months ago
Hi Coaches, One of the key takeaways from the live session was the pattern of great business:
  1. Simple product and business
  2. Recurring business (or solving recurring problem)
  3. Little to no risk of disruption
  4. Asset light (FCF to Equity >10%, Gross profit / total asset <60%)
  5. Pricing Power
  6. High PE
Just want to ask did I miss anything and what you guys meant by High PE? And how high is high PE?  
2 Answers
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Victor Chng Staff answered 3 months ago
Hi Andy,


Companies with these characteristics tend to enjoy higher PE multiples, as investors are often willing to pay a premium for their growth and quality.
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Andy answered 3 months ago
Usually what is the range of high PE? Is it above 25?
Victor Chng Staff replied 3 months ago

Hi Andy,

There is no fixed PE range. It depends on the characteristics of the company’s PE chart. High-growth companies usually command higher PE multiples because investors have higher expectations for their future growth.

Andy replied 3 months ago

Thank you, Victor.