SHARETIPSINFO >> Articles Directory >> How to invest and get more profit in share market
Investing in the stock market is not big deal at all. With the growing popularity of the online stock trading facilities, it is absolutely easy to invest in the stocks these days. But if you are serious about investing in the stock market and want to make long term investment and have a sustain income from your stock market investments, you need to work hard. You have to keep all the information about the stock market, the economic and commerce scenario of the country. Above all you have to keep tab on the industry and sectors and on the stocks to find the right stocks to invest in. The selection of the stocks as well as selection of the right time to make the investment on those stocks is very much important to make significant profit from the stock market. To find out the right stocks for investment you should follow some simple rules. Here we are presenting some practical tips and the points that you should check for selection of the stocks that will most likely appreciate in the near future.
Sales revenue of any company is a fundamental parameter to judge the financial strength of the company. Basically sales revenue gives you the amount that the company makes in a specific financial year. Though the sales revenue also includes some portion of the cost and loss made by that company in that year, it fairly gives an idea of the overall financial condition of the company. To get the sales revenue of any company you have to search for the annual financial report of the company that is published by the company.
Earning of any company is nothing but the net income of that company in a financial year. The earning of the company will give you a clear idea of the fact how much income the company is making every year. The earning of the company is surely an indicator of the financial position as well as the future of the company. If you find out from the annual report that the company has posted sustained growth over the last few years it is surely a great proposition for investment.
Debt is another factor that you should carefully check while considering the financial aspects of the company. Debt is actually the financial liabilities of the company. It can be loans and interests of the loans or any other type of financial liability. If a company is having huge debt to recover then it can be understood that most of the earnings of the company will go towards the recovery of the debts and the growth of the company will be hindered. So with other factors the debt of the company needs to be considered as well for appropriate valuation of the worth of the company and its future.
Liquidity reveals the cash holding of the company. It is standard procedure in the industry that a company with better liquidity or with more cash holding has more scope for expansion. It is quite natural therefore that if a company is holding a better position in terms of liquidity the company is most likely to expand in the near future and investing in this company can be really profitable.
Valuation of the company in terms of the assets and the stocks that it has in the market is essential to gauge the financial position of the company. The most popular and authentic way to measure the valuation of any company is to calculate the P/E ratio of the stock. This will give you fair idea of the valuation of the stock. By comparing current stock price with the P/E ratio you can easily determine whether the stock is undervalued or not. This will help you to speculate the future movement of the stock price and also let you decide whether to invest in the stock or not.
These are some of the basic tips for selecting the stocks and you can follow these steps to find the best stocks for investment.
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