Due Diligence Before Price

The method in brief

This page explains, with no secrets, how a company gets onto the watchlist and how we measure what happens next. It applies the same way to every company.

1. The business first, the price second

The method is called “Due Diligence Before Price”. It starts by asking whether the business is good, without looking at the share price: a screen (litigation, dependence on a few customers or suppliers, debt coming due, management, the company's own guidance, insider buying and selling, shareholder dilution) and, for those that pass, a full fundamental review in nine points. Whoever fails is out, however low the price.

2. The price reading, only afterwards

Only a company approved on the business gets here. We ask the question the other way round: instead of estimating what the company is worth, we ask what growth in the cash it has left per share (after investment and share-based pay) today's price is asking for over the next ten years, and compare it with what the company has already done and what is plausible. There are five grades; only the first two go on the watchlist:

Gold Selection — the price asks clearly less of the company than it usually delivers.

Silver Selection — the price asks roughly what it usually delivers.

The other grades (the price asks more than the company usually delivers) stay out, even for good businesses.

3. Long-term trend

We require the long-term price trend not to be against the company (the 50-week average above the 200-week one). We do not look for the best moment: we just avoid companies in a prolonged decline.

4. The €1,000 simulation

On the day a company is selected we simulate investing €1,000 in it at that day's closing price (the “reference price”). These are not real trades. Every company weighs the same, and each company's result, and the average, is compared with the indices (S&P 500, Nasdaq, Dow Jones and STOXX 600) over the same period, as if the same €1,000 had gone into each index that day.

Besides the return since selection, we show the day-by-day cumulative (TWR, time-weighted return). It is the measure funds use to judge a manager: it chains each day's return, as if, every day, the same amount went into each company on the list, so it does not depend on when each company joined or how much money was invested. It measures the method, not the luck of the moment.

Two limits, stated up front: the return counts price change only (no dividends, fees or taxes) and is computed in each company's currency, with no exchange-rate effect.

5. When a company leaves

No company leaves the list for being in the red, or stays for being in the green. It leaves only after an audit, which we run when the return falls 20% or more and always at 12 months from the selection date. If the audit says leave, the company moves to “Selected and later excluded” and the reason is explained in the newsletter. Nothing is deleted: the bad results stay in view.

An example: NOS

NOS is Portugal's second-largest telecoms operator. It passed the business screen (it is leaving its big fibre investment cycle and the cash left over grew). Only then did we look at the price: on 19 October 2026, at €5.23, the price asked cash per share to shrink 3.6% a year for ten years, when the company's revenue had grown 2.4% a year over ten. It asked clearly less than the company usually delivers: Gold Selection. That day we simulated €1,000 at €5.23, and the page follows it from there.

6. Free until it's not

This platform and the monthly newsletter are free while the project gets going. Later, they will move to a subscription. Take the chance to see whether it makes sense for you!

7. What this is not

It is not investment advice nor a personal recommendation. It shows a screening method and the results of what passed it. See the full disclaimer at the bottom of the watchlist page.