Selecting the best stock for investment is not a simple procedure. We will have to study and analyse a few facts before we invest in some stocks. It is too vast a subject to give a clear cut idea, the analysis of the following criteria will help you in selecting the best available stocks.
* Earnings Per Share(EPS) and PE Ratio
* Book Value Per Share
* Debt Equity Ratio (Divide Total Debt by Total Equity)
* Current Ratio (Divide Current Assets by Current Liabilities)
* Profit Margin (Divide the Net Profit with Revenue)
* Return on Capital Employed and Return on Equity
* Dividend History
* Profit Growth
* Cash Flow Details
* Business Segment and Growth Potential
* Size of the Company
* Competitive Advantage In the Market
* Brand Value and Product Differentiation
* Goodwill
* Market Scenario
* Economic Strategy of the Company
* Economic Atmosphere of the Place of Main Operation of the Company
* Political Influential Factors of the Country
These are the criteria that help you in selecting the best available stock. However, it does not mean that the all of these criteria must be favorable for a stock for being eligible. You can leave out some criteria or give more weight age to the other favorable criteria over the adverse ones, depending upon the time period you are planning to held the shares or how much risk you are ready to undertake.
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