Would Buffett own this stock?

How the answer is built

Every Buffett verdict is scored on the same five pillars Buffett has talked about for fifty years. Each pillar is worth up to 20 points, and together they make the score out of 100.

1. 1

   Wide economic moat

   0–20

   Brand, scale, switching costs and network effects: whatever stops competitors from eating into the margins.

2. 2

   Capable, candid management

   0–20

   Managers who treat shareholders as partners: buybacks at low prices, candid letters and their own money in the company.

3. 3

   Consistent earning power

   0–20

   Ten-year ROIC ≥ 12%, predictable free cash flow, low capex relative to earnings.

4. 4

   Fair price, margin of safety

   0–20

   An owner-earnings yield above the long-term bond yield, with enough room that one bad year doesn't break the case.

5. 5

   Inside the circle of competence

   0–20

   If the business can't be explained on a napkin (what it sells, who buys it and why they keep buying), Buffett passes.