The Method

The Method

Every company we review is analyzed using The Sherco Group’s proprietary framework: The Sherco Score™.
This system is built on 15 carefully selected metrics that assess long-term business quality, financial resilience, valuation discipline, and historical financial consistency.

Every company we review is analyzed using The Sherco Group’s proprietary framework: The Sherco Score™.
This system is built on 15 carefully selected metrics that assess long-term business quality, financial resilience, valuation discipline, and historical financial consistency.

How We Evaluate Companies: Inside the Sherco Score™

How We Evaluate Companies: Inside the Sherco Score™



The 3 Core Pillars of The Sherco Score™:

1. Business Quality

Assessing a company's ability to generate sustainable profits and defend its market position.

Key metrics we review include:

  • Return on Invested Capital (ROIC): A measure of how efficiently a company generates returns from its capital.

  • EBIT Margin: Evaluating operational profitability across business cycles.

  • Earnings Growth Consistency: Identifying businesses that steadily grow earnings over long periods.

2. Financial Strength

Prioritizing businesses with strong balance sheets and responsible capital management.

Key metrics we review include:

  • Free Cash Flow Yield: Assessing the company’s ability to generate excess cash.

  • Net Debt to Total Capital: Measuring leverage and financial risk.

  • Dividend Payout Ratio: Gauging how sustainably a company returns capital to shareholders.

3. Valuation and Market Position

Evaluating companies with discipline, not hype.

Key metrics we review include:

  • Price-to-Earnings (P/E) Ratio vs Historical Norms: Identifying relative value opportunities.

  • Dividend Yield Relative to Long-Term Averages: Highlighting attractive income opportunities.

  • Free Cash Flow Yield vs Market Price: Confirming strong cash returns at reasonable valuations.



The 3 Core Pillars of The Sherco Score™:

1. Business Quality

Assessing a company's ability to generate sustainable profits and defend its market position.

Key metrics we review include:

  • Return on Invested Capital (ROIC): A measure of how efficiently a company generates returns from its capital.

  • EBIT Margin: Evaluating operational profitability across business cycles.

  • Earnings Growth Consistency: Identifying businesses that steadily grow earnings over long periods.

2. Financial Strength

Prioritizing businesses with strong balance sheets and responsible capital management.

Key metrics we review include:

  • Free Cash Flow Yield: Assessing the company’s ability to generate excess cash.

  • Net Debt to Total Capital: Measuring leverage and financial risk.

  • Dividend Payout Ratio: Gauging how sustainably a company returns capital to shareholders.

3. Valuation and Market Position

Evaluating companies with discipline, not hype.

Key metrics we review include:

  • Price-to-Earnings (P/E) Ratio vs Historical Norms: Identifying relative value opportunities.

  • Dividend Yield Relative to Long-Term Averages: Highlighting attractive income opportunities.

  • Free Cash Flow Yield vs Market Price: Confirming strong cash returns at reasonable valuations.

Thinking Beyond the Numbers

Thinking Beyond the Numbers


The Sherco Score™ is built on objective, measurable financial metrics — not forecasts, speculation, or personal opinions.

We believe disciplined evaluation based on historical business performance, financial strength, and valuation discipline creates a stronger foundation for decision-making.

However, long-term investors should also thoughtfully consider how businesses may need to evolve over time.

We encourage our members to complement their use of the Sherco Score™ with independent reflection, asking questions like:

  • How might this company's industry evolve over the next decade?

  • Is the business positioned to adapt, lead, or grow meaningfully from today’s foundation?

  • Are there credible future catalysts for growth — or signs of maturity and saturation?

For example:
McDonald's is a global powerhouse — but where does future growth come from once most global markets are saturated?
Nike leads athletic wear — but how will changing consumer preferences and competitive pressures impact their future market share?

At Sherco, we believe long-term success combines rigorous evaluation today with thoughtful consideration about tomorrow.
We will continue offering educational commentary to help members stay informed — while respecting every individual's ability to make independent investing decisions.


The Sherco Score™ is built on objective, measurable financial metrics — not forecasts, speculation, or personal opinions.

We believe disciplined evaluation based on historical business performance, financial strength, and valuation discipline creates a stronger foundation for decision-making.

However, long-term investors should also thoughtfully consider how businesses may need to evolve over time.

We encourage our members to complement their use of the Sherco Score™ with independent reflection, asking questions like:

  • How might this company's industry evolve over the next decade?

  • Is the business positioned to adapt, lead, or grow meaningfully from today’s foundation?

  • Are there credible future catalysts for growth — or signs of maturity and saturation?

For example:
McDonald's is a global powerhouse — but where does future growth come from once most global markets are saturated?
Nike leads athletic wear — but how will changing consumer preferences and competitive pressures impact their future market share?

At Sherco, we believe long-term success combines rigorous evaluation today with thoughtful consideration about tomorrow.
We will continue offering educational commentary to help members stay informed — while respecting every individual's ability to make independent investing decisions.

Proprietary Framework

Proprietary Framework


While we openly share the types of metrics we evaluate for transparency, the specific scoring thresholds, category weightings, and proprietary methodology behind The Sherco Score™ remain confidential.
This protects the integrity of the Sherco system and the value of our membership.


While we openly share the types of metrics we evaluate for transparency, the specific scoring thresholds, category weightings, and proprietary methodology behind The Sherco Score™ remain confidential.
This protects the integrity of the Sherco system and the value of our membership.

Why It Matters

Why It Matters


The Sherco Score™ is more than just numbers — it’s a disciplined, metrics-driven educational system built for members who are serious about quality, resilience, and long-term decision-making.

We don’t chase short-term trends.
We focus on identifying companies with durable business strength and reasonable valuations — offering members a structured, educational approach to thinking about long-term investing.

At Sherco, we believe that while objective financial metrics guide the foundation, thoughtful independent evaluation about a company's future prospects is equally important for lasting success.


The Sherco Score™ is more than just numbers — it’s a disciplined, metrics-driven educational system built for members who are serious about quality, resilience, and long-term decision-making.

We don’t chase short-term trends.
We focus on identifying companies with durable business strength and reasonable valuations — offering members a structured, educational approach to thinking about long-term investing.

At Sherco, we believe that while objective financial metrics guide the foundation, thoughtful independent evaluation about a company's future prospects is equally important for lasting success.

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