As the world's third-richest person and most celebrated investor, Warren Buffett attracts a lot of attention. Thousands try to glean what they can from his thinking processes and track his investments.

We can't know for sure whether Buffett is about to buy Central European Distribution (Nasdaq: CEDC) -- he hasn't specifically mentioned anything about it to me -- but we can discover whether it's the sort of stock that might interest him. Answering that question could also reveal whether it's a stock that should interest us.

In his most recent 10-K, Buffett lays out the qualities he looks for in an investment. In addition to adequate size, proven management, and a reasonable valuation, he demands:

  1. Consistent earnings power
  2. Good returns on equity with limited or no debt
  3. Management in place
  4. Simple, non-techno-mumbo-jumbo businesses

Does Central European Distribution meet Buffett's standards?

1. Earnings power
Buffett is famous for betting on a sure thing. For that reason, he likes to see companies with demonstrated earnings stability.

Let's examine Central European Distribution's earnings and free cash flow history:

Cedc

Source: S&P Capital IQ.

Earnings have been a bit rocky for Central European Distribution over the past five years, though much of the 2010-2011 losses have been due to charges that might not necessarily be recurring -- currency exchange losses, goodwill impairments, and asset writedowns.

2. Return on equity and debt
Return on equity is a great metric for measuring both management's effectiveness and the strength of a company's competitive advantage or disadvantage -- a classic Buffett consideration. When considering return on equity, it's important to make sure a company doesn't have an enormous debt-to-equity ratio, because that will skew your calculations and make the company look much more efficient than it is.

Since competitive strength is a comparison between peers, and various industries have different levels of profitability and require different levels of debt, it helps to use an industry context.

Company

Debt-to-Equity Ratio

Return on Equity

5-Year Average Return on Equity

Central European Distribution 191% (80%) 3%
Brown-Forman (NYSE: BF-B) 38% 29% 26%
Constellation Brands 119% 23% 1%

Source: S&P Capital IQ.

Of these distillers, only Brown-Forman tends to generate high returns on equity, and it does so with limited debt. Earnings growth built upon strong revenue growth and high margins has been impressive too. Historically, Central European Distribution has produced modest returns on equity despite carrying a moderately high debt load, while Constellation Brands' returns are a bit erratic. With its steady growth, healthy margins, and excellent returns on equity, Brown-Forman is actually looking a lot more like a Buffett stock in this department than either of the others.

3. Management
CEO William Carey has been at the job ever since 1997. He's also the co-founder of the Polish distiller that bears his name (Carey Agri). 

4. Business
Vodka has been around since the ninth century and isn't particularly susceptible to technological disruption.

The Foolish conclusion
So is Central European Distribution a Buffett stock? Probably not. Although the company does have tenured management and operates in a technologically straightforward industry, it doesn't yet particularly exhibit the other characteristics of a quintessential Buffett investment: consistent earnings and high returns on equity with limited debt. However, if you're interested in a stock that our top analysts and chief investment officer picked to beat the market, you can check out The Motley Fool's Top Stock for 2012. I invite you to download this special report for a limited time by clicking here -- it's free.