Verdykt
PlaybooksWarren Buffett

Warren Buffett

Quality compounder screen inspired by Buffett/Munger principles

Rules-based Verdykt interpretation. Not affiliated with or endorsed by Warren Buffett, Charlie Munger, Berkshire Hathaway, or related entities.

QualityFundamentals + priceMedium confidenceUS equities
QualityMethod familyMediumSource confidence7Documented factorsv1.3Rule version

Screen thesis

High returns on capital, durable free cash flow, and a conservative balance sheet — bought without overpaying. The screen rewards businesses that compound capital internally and only flags a valuation caution rather than excluding on price.

Rulebook

Every rule is visible. Required rules must pass; scoring and guardrail rules shape or caution the result.

View model card
RuleThresholdRoleRationale
5-year average ROIC>= 15%RequiredDurable quality proxy
Positive free-cash-flow years>= 5 of 5RequiredSelf-funding business
Net debt / EBIT<= 2.0xRequiredBalance-sheet resilience
Gross margin>= 40%ScoringPricing-power signal
Revenue CAGR (5y)>= 5%ScoringReinvestment runway
Share count change (3y)<= 0%ScoringOwner-friendly capital
EV / EBIT<= 20xValuation guardrailAvoid overpaying for quality

Verdykt Playbooks are rules-based interpretations of public investing principles. Screens are not affiliated with or endorsed by the named investors or firms, and nothing here is investment advice or a recommendation to buy or sell securities.