Listed below few imp. points which one should take care while evaluating a company for investment.....
1) Scalable - Size of opportunity, company should be operating in core sector or have some niche which can be further expended.
2) Cyclical or non cyclical - It is always better to invest in non-cyclical business, all commodity businesses are cyclic in nature.
3) Entry Barriers - Moat - Just ask yourself what is the difference between this company and others in the same sector, if you find any strong product/service or business model which distinguishes your company from other then it can be company's moats.
4) Govt regulated or not - It is always better to avoid Govt. companies where decision making is big issue and any company who's product or service are regulated by Govt.
5) Capex or non capex - Brick and mortal sector like Steel, cement etc involve lots of capital expenditure to run the business. Airlines, Real estate are another sector where capex is more. Better to avoid such business where lots of money is needed to run the show.
6) Whether such a model has been successful elsewhere in the world? - If such type of companies are success in US or Other part of the world then it will be successful in India too. Wal-Mart and Pantaloon can be in the same class for retail sector.
7) Consumer or industrial oriented - It is always better to look for the company which directly deals with end consumer like Bharti, Pantaloon etc....Any company which can pass increase in input cost to consumer can be well accepted. Ignore the companies which lies in between, like Petronet LNG etc.
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