Choose Right Stocks for Investment || some parameters to check right stocks

 

Introduction

   In this article we are lean to some important parameters of stocks to choose Right Stocks.

Parameters / fundamental

     1. Types of business - to know the busines model and future growths

     2. Market Capitalisation - to know the total capital of any business.

• Small cap companies 

        🔹more growth

        🔹 High risk

• Large cap companies

        🔹 Market cap 20k cr.

        🔹less risk

        🔹Less growth opportunities

• Mid cap companies

        🔹Less risk than small cap

        🔹more growth than larg cap

     3. Profit growth - check the company is making profit or loss.

       Growth - invest

       Losses - no invest

    4. Debt - to check the debt of any business.

      Company should be

• Debt free
• Debt is less than annual income

  

    5. Return on equity ( ROE ) - to check the return on equity ROE should be greater than 15 is great to buy any stock.

ROE = net income / shareholders equity

  

 6. Return on capital employed ( ROCE ) - the ROCE is greater than 20 is best for buy any stock.

ROCE = EBIT / total assets - total current liabilities

  

  7. Free cash flow - free cash flow of any business is important for expend company.

    Free cash flow is extra money to grow company

  

  8. Promoters Holding - promoter is a owners of any business.

Minimum 45 % is required

    9. Earning per share ( EPS ) - EPS > 1

   EPS = net income - dividend payments / weighted average share outstanding

 

  10. News - News is best way to know the busines mood or share Market.

To check share market here,  i give you some websites.

Screener

Tape ticker