Tuesday, May 26, 2015

How to pick stocks fundamentally?

Stock market is crazy sometimes. You invested in stocks for a long time and you didn’t get a penny from  your stocks. Instead it blew up your account; stop the behavior of making losses.  Try to cut the losses and make it to be minimum. I have already discussed how to pick the right stocks technically for investing for a period of three months to seven months. Most people don’t invest for years, these days. And individual investing plan may differ, this is an universal factor.  Don’t worry about the time period of investing and be dynamic with the time periods for investing. There could be some set of rules to follow, to pick your stocks on fundamental basis.  In the below steps , you will find have to pick stocks which are strong in fundamentals.

When you want to look at the fundamentals of the stock, it is better to look at the EPS and P/E  and also quarter results.  Jan to mar is 4th quarter, apr to june is 1st quarter, july to sep is 2nd and oct to dec is 3rd quarter. If there is an increase in the profits, it is good to keep that stock on radar. In first quarter the profits would be 3 crore but in the 2nd quarter the profits would be 27 crore. The profits are increased by 9 times and better look at this stock.

Look out for the P/E ratio, the less ratio is much better.  If the Profits per share to the earnings per share is less than 25. You keep the stock in radar.  These are the two fundamental principles to look in the stock.  You must look for the right stock which is breaking the year high and having this two criterias. Look out for this opportunity, I used to trade stocks using this method.  But it doesn’t end our talk on fundamentals of stock picking ….

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