Successful long-term investing requires a strategic approach to identifying and evaluating promising stocks. This article presents key strategies for investors looking to build a robust portfolio, drawing from the wisdom of seasoned financial experts. From seeking dividend stocks with valuable assets to aligning investments with global megatrends, these insights offer a comprehensive guide to making informed investment decisions.
- Seek Dividend Stocks with Valuable Assets
- Screen for Growth and Value Fundamentals
- Combine F-Score with Free Cash Flow Yield
- Track Insider Buying for Confident Investments
- Align Investments with Global Megatrends
- Analyze Financials and Competitive Position Thoroughly
Seek Dividend Stocks with Valuable Assets
When evaluating stocks for long-term investment, focus on companies that offer strong tangible value beyond just their core products or services. Two key indicators I look for are:
- Stocks That Carry a Dividend – A dividend is a portion of a company’s earnings that is distributed to shareholders, typically on a quarterly basis. It’s essentially a reward for owning the stock, and it can provide steady income even when the stock price fluctuates. Companies that consistently pay dividends tend to be financially stable and committed to sharing profits with investors. Long-term, dividend-paying stocks can compound returns through reinvestment, offering both income and growth potential.
- Companies That Own Assets—Especially Real Estate – Some companies are far more valuable than they appear on the surface because of the assets they own, particularly real estate. For example, McDonald’s isn’t just a fast-food giant—it owns billions in prime real estate around the world. Starbucks is another example of a company that owns many of its standalone locations. Simon Property Group is not just a management company; they literally own the malls that generate retail traffic. These asset-heavy companies have a built-in hedge against inflation and economic downturns because their property holdings typically appreciate over time, providing stability and value that goes beyond product sales.
By combining dividend income with underlying asset strength, you can build a portfolio that generates steady cash flow and also holds up during market volatility with asset strength.
Brian Gossett
CEO, Dyverse Ventures
Screen for Growth and Value Fundamentals
Identifying stocks for long-term investment starts with understanding their intrinsic value and evaluating their potential for sustained growth. A methodical strategy involves screening for companies with strong fundamentals, such as consistent earnings per share (EPS) growth and manageable debt levels. Metrics like a PEG ratio under 1 or forward P/E below 15 indicate opportunities where growth potential aligns with reasonable pricing. This ensures that you focus on businesses that are expanding and undervalued relative to their future earnings.
Beyond financial metrics, it’s crucial to evaluate the broader business context. Companies operating in growing markets with expanding moats, such as strong intellectual property or high customer loyalty, are better positioned for long-term success. Moreover, assessing management’s vision and ability to adapt to challenges like economic downturns or industry disruptions provides additional confidence in your investment decisions. Combining quantitative analysis with qualitative insights creates a comprehensive framework for identifying stocks that can deliver consistent returns over the years while minimizing risk.
Richard Dalder
Business Development Manager, Tradervue
Combine F-Score with Free Cash Flow Yield
One strategy I rely on to identify promising long-term stocks is combining Piotroski’s F-Score with Free Cash Flow Yield (FCFY) as a two-layer filter. It’s simple in concept but powerful in practice: I want companies that are both financially sound and generating real, unencumbered cash at attractive valuations.
The F-Score is a 9-point checklist based on fundamentals—things like profitability, leverage, and operating efficiency. I screen for scores of 7 or higher, which research shows tend to outperform over time. Then I apply an FCF Yield threshold of 5% or more, focusing on companies that return significant cash relative to their enterprise value.
This method saved me from chasing “story stocks” more than once. During the 2022 market pullback, it surfaced a security software firm trading well below fair value but with strong cash flow and an F-Score of 8. While others were betting on turnarounds or hype, this pick compounded quietly–and is still in my portfolio with double-digit annualized returns.
What makes this approach work:
- It’s grounded in fundamentals, not market noise.
- It filters out companies with weak balance sheets or cash burn.
- It enforces discipline—I’m not buying unless both boxes are checked.
Don’t just chase value or quality in isolation. When you require both, you dramatically increase the odds of finding durable, compounding businesses—without the drama.
Ahmed Yousuf
Financial Author & SEO Expert Manager, CoinTime
Track Insider Buying for Confident Investments
One strategy I use to identify long-term stocks is tracking insider buying activity, especially among executives and board members. When company insiders are consistently purchasing their own stock with personal funds—rather than receiving shares through compensation—it signals confidence in the company’s future performance. I don’t treat insider buying as a standalone green light, but it’s a powerful indicator when combined with solid fundamentals.
Once insider activity draws my attention, I evaluate the company’s earnings consistency, balance sheet strength, and industry position. I also review recent filings and earnings calls to understand the context—are insiders buying after a temporary dip, a product launch, or strategic shift?
This method often leads me to under-the-radar companies with long-term upside that the broader market hasn’t priced in yet. Insider conviction, especially during market pullbacks, can offer valuable insight into a company’s intrinsic value and long-term growth potential.
Rose Jimenez
Chief Finance Officer, Culture(dot)org
Align Investments with Global Megatrends
A strategy I use to identify long-term investment opportunities is focusing on megatrend alignment—looking for companies positioned to benefit from large-scale, structural shifts in the global economy. Whether it’s clean energy, digital transformation, aging populations, or AI integration, I seek out businesses that aren’t just surviving in these spaces but are actively shaping them.
Once I identify a trend, I dig into industry leaders or emerging players within that theme. I evaluate their revenue growth, R&D investment, and how well they’re positioned against competitors. I also pay close attention to their market share trajectory and scalability, which are strong indicators of long-term potential.
I prefer companies with a clear, forward-looking business model, even if they’re not yet highly profitable. If they show strong unit economics and a path to sustainable margins, I’m more willing to hold through short-term volatility. This trend-focused approach helps ensure my portfolio evolves with where the world is heading—not where it’s already been.
Wes Lewins
Chief Financial Officer, Networth
Analyze Financials and Competitive Position Thoroughly
Identifying stocks that have the potential for stable market growth is a full-blown, ever-evolving process that requires constant decision-making around a firm’s geo-economic position. To accomplish this, I conduct a multi-pronged approach on a firm’s financial statements, including the income statement, balance sheet, and cash flow statement to ensure the business demonstrates consistent revenue growth, manageable debt levels, and solid free cash flow generation. Then, along with others, I assess the industry or sector to understand the company’s market position in comparison to its competitors with a focus on the company’s brand strength, proprietary technology, or high barriers to market entry.
Other indicators such as one’s credibility as a manager vis-à-vis aligning with the shareholders count P/E, P/S as well as P/B scores against historical data are critical. Additionally, understanding the management team’s track record with shareholder interests is paramount for a firm’s growth, thus I evaluate leadership’s decisions around dividends and insider ownership. From experience, this tailored, rudimental-based approach strengthens investment conviction beyond short-term market trends towards strong structural growth sustainably.
Nathan Barz
Financial Advisor, Management Expert, Founder and CEO, DocVA
