P

P

LORD JESUS CHRIST SAYS

But I say to you, Love your enemies and pray for those who persecute you, so that you may be sons of your Father who is in heaven; for he makes his sun rise on the evil and on the good, and sends rain on the just and on the unjust.

19 Oct 2018

STOCK MARKET-- Which are the methods to select fundamentally strong stocks for investing in the Indian stock market? On what parameters do we find them?


Hello Investors,
Finding the stocks on the basis of Fundamentals is Tricky. Their are lots of parameters which can be used according to me which will defiantly help you in choosing a right stock for you.
Parameters:-
1st:- Share holders equity, Share holder equity places a vital role in choosing the right stock. A good stock will always has a constant share capital, Stock which changes its share capital from time to time does’t comes in the category of good stocks.
2nd:- Reserves:- Reserves also plays a important role in choosing a good fundamental stock. A stock which has a growing Reserves on regular basis year on year is considered a good stock for investment.
3rd: Debt:- Debt:- Every Company should keep a check on the debt. A company which is reducing its debt every year is considered to be good fundamentally strong company.
With these we can have a quick look on the balance sheet of the company.
Lets Check on the balance sheet of the rain industry:
Share capital is constant since dec 13
Reserves are increasing
Debt is decreasing
These are the parameters to check the balance sheet of any company.
Further You don’t have to Stick to only balance sheets, lets move to the profit and loss statement of the company.
For judging the stock fundamentally profit and loss statement a company should had the following parameters.
1st: Net sales, Sales are the back bone of any company. Any company which has constant increasing its sales can be considered a good company.
2nd: Increase in the Consumption of raw material of the company.
3rd: Increase in the employee cost of the company
4th : Decrease the Interest.
5th: Increase in profits.
These all parameters are considered while looking at the good fundamentally strong company.
Why to just stop on these parameters only, Now lets talk about its ratio’s.
Ratios can give you a quick look.
While looking for a strong fundamental stocks these ratios are a good to look.
1st: EPS
2nd:- P/E RATIO
3rd:- ROE
4th:- DEBT TO EQUITY RATIO.
5th:- CURRENT RATIO
6th:- ASSET TURNOVER RATIO
7th:- PEG RATIO
8th:- PRICE TO BOOK VALUE
9th:- Intrinsic Value.
Its always good to do some of the fundamental analysis before putting your hard earned money in any stock.
After all you are purchasing not just the stocks but a whole company.
From this good note I hope You get a better idea to judge the stocks.
Regards


No comments:

Post a Comment