My stock-picking methods shared

I would like to post my stock selecting processes here (a typical fundamental value investing approach), it will be served as my stock-picking method in both Singapore & US markets:

Step 1: Looks for stocks with strong fundamentals

     a. Profitability test:

         ROE > 15%
         Gross Profit Margin above industrial average

     b. Growth rate test:
         EPSGR > 10%

     c. Financial health test:
         Debit/Equity Ratio < 0.5
         Quick Ratio > 1
         (Quick Ratio = current asset - inventories / current liabilities)
         Long Term Debt < 3 times its annual net income

      d. Undervalue test:
          Current PE < Average PE
          Average PE = (historical highest PE + historical lowest PE) / 2
         
          Current PB ratio < industrial average

Step 2: To find a real bargain deal

      a. How to calculate Intrinsic Value - to determine P(a)

         a example to find P(a) Apple Inc.

         last 10 years EPSGR% = 23.61% (from 2000 to 2009)
         2009 EPS: $9.08
         2019 estimated EPS = $9.08 x (1.2361)^10 = $75.62

         last 10 years average PE ratio = 55.72 (from 2000 to 2009)
         S&P 500 average PE ratio = 18.39
         Since last 10 years PE ratio seems too high we will use S&P 500 PE ratio

         2019 estimated stock price = $75.62 x 18.39 = $1,390.65

         set IRR (internal rate of return) at 15%
         Intrinsic Value = $1,390.65 / (1.15) ^10 = $343.37
         P(a) = $343.37 x 75% = $257.53

     b. Calculate P(b)

         P(b) = P(52weeks low) + (P(52weeks high) - P(52weeks low)) / 3

         Use Apple Inc. as a example:
         P(b) = $185.55 + ($ 315 - $185.55)/3 = $228.70

     c. Identify the fair stock value P(fair):

         P(fair) = lower one of P(a) or P(b)
         So P(fair) for Apple Inc. = $228.70

     d. If P(current) < P(fair) is a indication to buy the undervalued stock

         Current price $315 are too high, we should not buy it at this moment.

Step 3: Always remember we are buying a Business, not a Stock - Economic Moat

      a. a strong management
      b. in a growing industry
      c. sustainable competitive advantage
          - A strong brand (eg. Coca-Cola, Exxon Mobil, McDonals's, Visa, Google)
          - Patents and trade secrets (eg. pharmaceutical companies like Pfizer)
          - Gigantic economies of scale (eg. GE, Wal-Mart, Amazon)
          - Market leadership that competitors very difficult to overtake (eg. GE, eBay)
          - High switching costs that lock in customers (eg. Adobe, Microsoft)
          - Monopoly status (eg. SPH, SGX, SMRT)