How To Pick Quality Equity Stocks
Selecting the quality stocks is very important to earn more money in equity segment; the following some of the important parameters need to follow while picking the equity stocks:
Selecting the quality stocks is very important to earn more money in equity segment; the following some of the important parameters need to follow while picking the equity stocks:
- Debt To Equity Ratio:
The important ratio to know the debt status of any company, it is calculated by
Total debt/Total Equity
If the debt equity ratio is less than 0.50%, then we say the company is almost a debt free company, so please take care of debt equity ratio is less than 0.50% before investing
Even the debt to equity ratio is high and still you want invest, then look at the previous years, if you find debt is showing down year after year, then you can invest in it, it means company is growing & repaying debt year after year
Total debt/Total Equity
If the debt equity ratio is less than 0.50%, then we say the company is almost a debt free company, so please take care of debt equity ratio is less than 0.50% before investing
Even the debt to equity ratio is high and still you want invest, then look at the previous years, if you find debt is showing down year after year, then you can invest in it, it means company is growing & repaying debt year after year
- EPS (Earning Per Share):
It helps you to know, how much you can earn per share. EPs is one of the most important factor to park your money in right place
Total Earnings /Outstanding shares
If eps is rising yoy, means the company is performing well & earning good
Total Earnings /Outstanding shares
If eps is rising yoy, means the company is performing well & earning good
- PE Ratio:
Most of the investors will PE Ratio before investing in any stock
If you purchased 1 kg of mangoes at Rs 200 per kg, after you found they were available at Rs 150 per kg, you will be disappointed at paying more for the same quality of mangoes? Same applies to stocks even
Always prefer to buy at low PE ratio, to get better value to your investments
If you purchased 1 kg of mangoes at Rs 200 per kg, after you found they were available at Rs 150 per kg, you will be disappointed at paying more for the same quality of mangoes? Same applies to stocks even
Always prefer to buy at low PE ratio, to get better value to your investments
Always look the gross & net profit margins, see how it is improving yoy and also compare with industry
- Sales:
Review the sales numbers YoY & QoQ improvements, good sales helps the company to generate more revenues to the organization.
Do your own analysis instead of listening to expects, friends, relatives, otherwise you may lose the money, follow research reports if any to identify the best stocks
Do your own analysis instead of listening to expects, friends, relatives, otherwise you may lose the money, follow research reports if any to identify the best stocks
