How to identify if the stock is good for investing & fudamentally sound...?

Answer 1

There is absolutely no assurances that any company you might invest in is fundamentally sound and a good investment. Many that investors assumed were sound were far from it. The list would fill many pages. To improve your chances of investing in sound companies that are good investments, there are a few tricks. 1. Invest in about 10 to 20 different companies. That way if one goes belly up, you have not ruined your entire portfolio. 2. Invest in companies that have a history of increasing their dividends. That is generally a good sign that the company is more or less sound and a good investment. 3. Avoid companies that have high pe ratios. They are very suseptable to falling drastically in price at the least bad news or the least down turn in the economy or even just because.

Answer 2

stock picking strategy.

On what kind of an investor he is

I don't think it's possible to bracket investors as aggressive or conservative. If aggression means investing in stocks that nobody else is buying, then we are aggressive.

If staying away from momentum investing is conservative, then we are conservative.

We are disciplined investors and follow a stock-specific approach.

Investors look for absolute returns. We too believe that one can generate absolute returns over a period of three to five years irrespective of the markets.

On his stock picking strategy

Large-caps

In large-caps, we break up the stocks into sectors, and then rank the stocks in terms of how much gap there is between the share price and the share value.

For example, we have targets of the P/E ratio or PB ratio or EV / EBITDA, or discounted cash flow based valuation.

Based on this, we have a list of stocks that will do well in every sector. These stocks are listed in descending order and based on the rankings, we pick one or more stocks.

Mid-caps

We do not like to invest in mid-caps that are doing well just because the business cycle is positive.

We would like to put our energies into identifying stocks that will become much larger companies because of opportunities, progress and growth.

We have five filters, and only if a stock passes one of these filters will it enter the portfolio.

1. The first filter is to identify stocks in sunrise industries. These are companies that have the right strategies in sectors that will do well in the future.

One such industry we identified was retail and we invested in Pantaloon Retail last year.

2. The second filter is that the company should be in a niche business. This filter throws up companies that operate in a niche area and are not affected by other players.

One niche stock that we invested in is Hexaware Technologies, which focuses on a particular georgraphy in Europe, where it has become the market leader and operates in human resources and IT services.

3. The third filter is to pick stocks that are leaders in their own businesses and are large-caps of their own sectors. When growth happens, these companies will consolidate their position and become large-cap companies. One example here is Blue Dart, the courier company, which is a leader by far.

4. The fourth filter is stocks that are proxies to large-caps, in the sense that they are from the same industry and because they are mid-sized companies, there is a discount in valuation. The company's fundamentals do not merit the discount.

When we buy a company like this, we invest in a proxy to a large-cap plus we get the benefit of improved valuation. We bought Shree Cements through this filter. It was a hugely profitable cement company and was available at 40% to 50% discount to the rest of the industry.

5. The fifth filter is picking globally competitive mid-cap companies, which are doing big things outside India. Since these companies are looking at a wider canvas than India only, there is a prospect that as they become more successful in their strategy, they can become much larger corporations. The examples here are Micro Inks and Crompton Greaves.

Answer 3

I like to look for growth in revenues and earnings. I like to see little or no debt. I like to see a good return on equity and a good profit margin. Then, if I see some insider buying, then I think about buying. Bolt Technology, symbol BTJ, is an example of a stock with some very good financial numbers. You can find financial stats at yahoo finance.

For great investing ideas, see what the best investors are buying and selling at http://www.top10traders.com - this is a free site that lets you create a portfolio of stocks with $100,000 in "play" money. Each day the site ranks the best performing portfolios, so you can see how your picks perform compared to other investors. You can also read posts on investing from the best traders, as well as share your own investing ideas. There is also a charting feature , so you can see how your portfolio performs compared to the S&P 500.

Here are this month's best traders:

http://www.top10traders.com/Top10Standings.aspx

Good luck.

Answer 4

TO know more about the company one must go with the company's profile/the profitability track records/growth in the sales/revenue/income, the experience of the promotors and the chart analysis of the moves of its share prices in the market.
If u study these things for several companies u will well find fundamentally strong stocks.

One more thing u have to decide in which sgment of investing r u going Long term (>12 Months),Medium term (>1 M-6 M), an Short term ( 3 Days-1 M). U can decide ur strategy in these ways.
In my opinion for medium term: Bombay Dyeing/Tata Steels are the best buys.

THANKS

Answer 5

That is the question for the ages, isn't it.

Many variables go into that. Is the company profitable? Do they have good management? Do they have a record of revenue growth? What do their sales prospects look like in the future? Are they developing attractive new products or services? How is the overall business sector doing that they are in? What is their competition up to? Is the P/E ratio attractive?

It takes quite a bit of research to find a good stock.

The good news is that most of this is available on the web. Start with the company web site. Check out investor relations, and information about the management and products. Then go to financial sites like Yahoo Finance and look at the financials, stock history, news releases, analysts reports, etc.

Answer 6

If u are willing to pay 1500rs subscribe equitymaster.com. they will give u every week one tip and u can invest. Their success rate above 90%

Answer 7

use technical analysis with buy sell signal 4 investing

try aptistock freeware

details visit my blog

Answer 8

.simple study the history of the company.

Answer 9

Look it up in Standard and Poors

Answer 10

use valuline (or is it valueline)
tried and true and proven over time.