How To Buy Good Stocks?

IamCheated.com Research Team | February 22, 2018  7:06:pm

Before investing your hard earned money in the stocks of a Company, you should first analyze the stocks and determine if they are worth buying. There are many factors which help you analyze, whether stocks are worth buying or not.

Following are some of the factors which help you analyze stocks.

1. Do proper research on the company

Before buying the shares of any company, you should do proper research on the company. You should know the company's profile, its current holdings and its future projections. Avoid buying the stocks of a company which is making losses, because you will lose your money, if you invest in such companies. You should also go through the company's past financial performances.

2. Analyse the stock prices

While investing your money in the stocks of any company,  you must analyze the price of the stock. Go through the historical price of the stock and find out the return it has given over a certain time period. You should also see if there are any stock splits.

3. Understand the product and the competitors

Study the product and its market response. Knowing this will help you understand, the future performance of the company. You should also know who are the competitors and what is their market share.

4. Revenue of the company

Knowing the revenue of the company is very important. The share price of the company will automatically go up, once the revenue of the company increases.

5. Dividend distributed by the company

The dividend is a payment made by the Company, to its shareholders. This is additional money you can earn on the shares. If the company is paying a good dividend to its shareholders, it shows that it is a stable company with a good track record of profit.

6. Earnings per share

Earnings per share helps evaluate the profit that you can earn on the shares. Earnings per share is calculated by dividing the net profit of the company per quarter, by the total number of outstanding shareholders.

7. M-cap of the company

Market capitalization is the total value of the company. You should opt for a company which has high market capitalization. Companies with large market capitalization remain less affected by small shocks and shares are less volatile. 

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