How to choose best stock

How to choose profitable stock

Before buy a stock you have to consider this factor.Every investor want increase his stock after buy.if you are new investor in stock market just flow the simple rule to buy best stock. 
Technical analysis is evaluation of stock and share market condition.

Today we are talking some fundamental analysis. Its study every things of company and financial reports.

Some factor is here you have to see before buy a stock.   

  •   Search information about company 
  •   See financial reports
             ·             Earning per share (EPS)
             ·             Price earning ratio (P/E ratio)
             ·             Dividend yield
             ·             Debt to equity
             ·             ROE
             ·             Income and Expensive
  •    Volume of trade
  •    Take inside information




  •    Search Information about company


     You are thinking a buy share in a first time then you collect all         information about that company .In this period you know little       bit bad and good knowledge of company. Information help you       for take risk and confidant. You can got information from               company website, newspaper and internet.

  •    Earnings per share (EPS)

    Earnings per share (EPS) means how much money of net                income have been earn by each share. After tax income divided      by total outstanding share is called EPS.the company how                much  money make for per share .

    Let’s see EPS by share:

   = Net income – dividend /Total outstanding share

          Suppose one company this year earn after tax 20m and                   announced 8m dividend .this Company have 6m outstanding            share.

         = 20-8/6
         =12/6
         = Rs.2
That means company earn per share Rs.2

Tips: Buy always high Eps Company

  •    Price earning ratio (P/E ratio)

      How much investor willing to pay stock for earning per share .        simple way how much you should pay for get one share                   earning

Look at the exp.

The company share price is Rs.10 and EPS is Rs.2

                           = Market price / EPS
                           = 10/2
                           = Rs.5     
     This means the market price is 5 time the earning of company.         Simply investor willing to pay Rs.5 for earning Rs.2

Tips: Always choose low P/E ratio stock

  •    Volume Trade

       Before buying a share always check the volume trade history           of share .if trading volume is not high that means investor are         not willing to buy this share .do not pick up the share see the          cheapest price it will be problem when you want sell that time        you can’t get any buyer for your share so always look at the            trade volumes too.

  •    Dividend

     Dividend is a reword of the shareholder .before you buy share         check the company dividend history .if company provide                 regularly dividend that means this company is blue chip. Good       dividend Pay Company’s stock price does not fall plummet .

  •    Take information

      Take information inside of company .you can take                            information  of company from website, news paper etc.
      Before you buy share you have to know about company such          as who is a management member .how much CEO share in              the company .what is a financial report .what kind of product          company product and sell .what about its future market in                outside .

       You consider this all basic factor before buy share or stock.






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