Group 1 - The core principle of evaluating companies in the consumer sector is to focus on the quality of revenue growth rather than just the revenue figures themselves. Companies that achieve growth through discounts may damage their brand value over time, while those with stable gross margins indicate strong pricing power and brand loyalty [3][4] - Cash flow is emphasized as a critical indicator of a company's financial health. A company that consistently generates operating cash flow that covers net profit over three years is seen as financially robust, especially in the fast-moving consumer goods sector where quick cash turnover is essential [3][4] - Inventory turnover rate is highlighted as a key metric. Companies with improving inventory turnover rates demonstrate effective sales and supply chain management. High inventory levels can lead to markdowns and losses, as seen in a case where a fast-moving consumer goods company faced significant write-downs due to poor inventory management during the pandemic [4] Group 2 - The investment strategy for consumer stocks should follow a three-step approach: first, filter for financially sound companies using financial reports; second, conduct on-the-ground research to assess product sales; and third, monitor the strategic direction of management. This comprehensive approach helps avoid pitfalls, as illustrated by a case where a company with strong financials was ultimately disregarded due to logistical issues [4][5] - The "Three Good Principles" for investing in consumer stocks are established: good products, good turnover, and good cash flow. Companies that can consistently increase market share, optimize gross margins, and manage inventory risks are considered the true leaders in the consumer sector [5]