• A PEG less than 0.75
• Market Capitalization greater than £20m
• PER less than 25
• Positive Cash Flow
• Positive Relative Strength over the last 3 and 12 months
• Net Gearing less that 50%

• Earning Per Share
• EPS Growth Rate
• Dividend Yield
• Shareholders Funds

PER = Share price / earnings per share

EPS = Company Earnings / No of shares

EPS Growth Rate = (Future Predicted EPS - Current EPS)/ Current EPS

• There are brokers forecasts
• EPS growth is seen in 4 consecutive years (including future years)
• There has been no profit loss in the last 5 years

PEG = PER / EPS Growth rate

Market Capitalization = Share Price * No Of Shares

Dividend Yield = Dividend per Share / Share Price

Cash Flow = Operating profit + Returns on Investment - Interest Paid - Dividend to Preference Share and Minority Holders - Tax Paid

Shareholders Funds = Ordinary Share Capital + Preference Share Capital + Reserves

Net Gearing = (Total Borrowings - Cash and Near Cash Assets) / shareholders funds

Relative Strength = Gain in Share price / Gain in FT-SE All Share Index