I want to buy stocks. What kind of info should i check to determine whether it is a good stock??

Question

my friend tell me to see the P/E ratio, regularity the company pays dividend, historical prices and volume, expected return and risk, expected news. anyone has other suggestions?

Answer 1

Basically, Earnings per Share Growth Rate (EPSGR) and Return on Equity (ROE) is my two top stock screening strategies.

High EPSGR (12 to 15%) over time (as long as five to 15 years horizon) indicate the company able to consistently outperform industry average. High ROE (12 to 15%) shows that the company has prudent management with shareholders' interest at heart.

Then, I use historical P/E, dividends payout and stock prices to estimate its intrinsic value. By discounting its future price, I can discover how much the stock should be worth for currently. Then, I can reduce my risk by buying the stock only when it reach its margin of safety.

On top of that, revenue growth is another good indicator. it shows its resilience and how the market accept their products. Debt is also important to ensure that the stock able to survive in case of economic turmoils.

Answer 2

There are three things you want to look at:
First look at every public company you use. Let's say you go to Starbux. Is there more customers each time you go there or less customers? If your Starbux because dead to the world, chances are it is happening elsewhere and you will realize it's time to sell before the earning reports come out. On the flip side if you go from waiting inside to forced to take reservations because of the crowds, then you might want to buy more stock.

Then you look at future growth. If you see it becoming obsolete before you sell, chances are you don't want anything to to with the company. This is especially true for fashion designers. When I was a kid, Jordache jeans and Levis were big, but then Levis nearly went under and I haven't seen Jordache in at least a decade.

Then look at the PE ratio and top it out around 20. Any higher than 20 and you will probably see a down turn on the horizon. Many tech companies in the 90s were trading with a PE well over 100.

Answer 3

The main information to look out for are company's earnings and balance sheet. These are the 2 main things you need to know to assess the business. A low P/E may not be a good indicator if the P/E is low due to reduced earnings and not price. Dividends is not a good indicator either because it is not an effective way to reward shareholders due to tax implications. Warren Buffet's Berkshire Hathaway do not pay dividends even they are growing at double digit rate.

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Answer 4

usually the p/e ratio is the best indicator, but you know reading over their financial history and kind of monitoring the sectors that affect their business helps. are there any trends in commodities that would affect the biz in the long run. things like oil and power affect all markets, but if its a clothing company things like cotton might affect it. so take a leap like that..

Answer 5

Sales growth rate, earnings growth rate, earnings acceleration, P/E, fP/E, capitalization, shares out, institutional ownership, industry group, story, support/resistance, overhead supply.

Answer 6

read the following books,
the intelligent investor
security analysis


these books will help you out a good bit.

Answer 7

Hi, i recommand you a good and basic tutorial for investing. it covers all Issues related to your Investing and everything around it.

http://www.investingtutorial.info/

wish it will help you.

Good Luck , Best Wishes!