How to identify a good company?

vegasbabay · 1 How to identify a good company? Sat Jul 09, 2011 10:05 am

vegasbabay

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How would you decide whether a company is good or bad for investing just by fundamental analysis.I read somewhere it is not only sufficient to use things like EPS and P/E. What other factors we should consider?

Also, what are the most important thing(s) in a annual, quarterly reports we should look at? thanks in advance.

i am a newbie please bare with me. scratch

thambi · 2 Re: How to identify a good company? Sat Jul 09, 2011 5:28 pm

thambi

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please reseach in google and/or investment books
my personal favorites are jesse livermore,ben graham and of course warren buffet

net assets per share is an important piece of information also book to price value , price to sales ratio,projected growth in earnings (PEG),return on equit(ROE)....

there are many other ratio, aspects and external information to be considered as a complete newbie i would advise you to read as many books as possible research the internet, read senior members comments and article on this website and others, and especially newspapers and other news media

from experience i want to advice you that the stock market isnt as easy as people say it is to earn profit, quick money is very hard for newbies to earn so buy solid and well performing companies, do not follow speculation and the crowd in cse you will eventually be the loser

please be careful this is not only for you but any other newbies in the colombo stock exchange and most importantly do your own research and you will be fine good luck Smile

RichDad · 3 Re: How to identify a good company? Sat Jul 09, 2011 6:40 pm

RichDad

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http://forum.srilankaequity.com/t4996-points-to-be-analyzed-before-picking-a-stock-experts-kindly-contribute

Hope this helps...

nkalansu · 4 Re: How to identify a good company? Sat Jul 09, 2011 10:13 pm

nkalansu

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vegasbabay wrote:How would you decide whether a company is good or bad for investing just by fundamental analysis.I read somewhere it is not only sufficient to use things like EPS and P/E. What other factors we should consider?

Also, what are the most important thing(s) in a annual, quarterly reports we should look at? thanks in advance.

i am a newbie please bare with me.

I am 34yrs. I am a CIMA qualified accountant. Also I have an MBA in Finance. It is very hard for me to answer your question in this forum since there are so many things you have to learn. That you have to learn slowly, patiently and with effort.

I will tell you an easy method. Just log on to the internet and go to www.youtube.com.

There you find endless presentations, lectures, other video self learning material. just type your question there and you will gain valuable knowledge. Just go and type ...say.... How to identify undervalued stocks or PE ratio....or earnings per share..... you will at the same time get related other topics too. so you could learn yourself.

There is a presentation series done by Mr. Tim Bennett. (Just type "moneyweekvideos" in the search engine of the youtube) Very useful for stock investors.

Last edited by nkalansu on Sat Jul 09, 2011 10:17 pm; edited 1 time in total (Reason for editing : additional information)