Martin Roth’s book “Top Stocks” has been published annually since 1995 (29 editions) and highlights ~100 Australian listed companies considered financially sound.
During Martin's analysis, a company’s share price is ignored. The goal is to select companies with a strong balance sheet and a focus on profitability, debt levels and dividends.
The companies mentioned in the book provide investors with a great fundamental filter over Australia's ~2,300 listed companies. The final shortlist can be used as a watchlist, or to simply uncover companies that might warrant further investigation.
The 2023 criteria for a “Top Stock”:
- Publicly listed since 2017
- A constituent of the All Ordinaries Index (i.e. Top 500 company by market capitalisation)
- Return on Equity (ROE) ratio of at least 10% in the most recent financial year
- Debt-to-Equity (D/E) ratio less than 70%
- Foreign registered stocks and listed managed investments are excluded
The list below includes all companies mentioned in the 2023 book plus those currently meeting the criteria.
In the 29 editions of Top Stocks, only Commonwealth Bank has appeared every single year.