I thought it would be worthwhile to share the results of my first investment portfolio on Stockopedia. By way of introduction I’m a private investor in my late-twenties with no previous experience in investing in the stock market prior to this year. In fact I’m pretty certain I couldn’t have told you the difference between a PE Ratio and a Dividend Yield last December!

My strategy for learning to invest was to read as much as possible from the best investors before making the dangerous decision to commit any money to the stock market. For anyone here that’s new to investing, the books I would highly recommend are the Intelligent Investor (i.e. the Bible) by Benjamin Graham, Five Rules for Successful Stock Investing by Pat Dorsey, You Can Be A Stock Market Genius by Joel Greenblatt and for those starting early Millennial Money by Patrick O’Shaughnessy.

My Strategy

After reading a number of books, I created a £42,000 portfolio in January 2015 with the aim of investing in UK small-cap companies.

My strategy was to identify good quality, reasonable-priced, growth companies with positive market sentiment. Investing in small-caps is inherently risky so I wanted to ensure that the companies I was investing in were financially sound, which to me meant having a reasonable debt position and the capability of paying out dividends to shareholders.

I set about finding these companies using a rule-based investment strategy in an attempt to minimise the cognitive biases of stock selection that we’re all plagued by.

Clearly the Stockopedia Stockrank metrics for ‘Value, Quality and Momentum’ can provide a good starting point, but I wanted to delve deeper than this and identify the most important individual metrics in each of these categories, amalgamated from the advice from a number of successful investors.

The Rules

The screening criteria I decided upon were as follows:


Enterprise Value /Free-Cash-Flow < 20

     PE Rolling 1yr <20


     Relative Strength 6m> 0


     Earning-Per-Share 3yr CAGR > 0


Return on Capital Employed > 12%

Financial Health:

Long Term Debt < 5x Net Profit

     Dividend Yield > 0%


     Market Cp > £20M

     Market Cp < £1000M

     Sector Exclude:Financials

These screening criteria identified 21 stocks on 2nd January 2015. The vast majority of the stocks were…

Unlock the rest of this article with a 14 day trial

Already have an account?
Login here