HomeEducationHow to Decide which Stock to Buy in Less than 10 minutes
How to Decide which Stock to Buy in Less than 10 minutes
28 April 2019
In this time and age where we want everything to be done fast and quick, we want to decide if the stock that we are looking at is worth taking a second look to decide if we should take it further. With a large abundance of stocks being listed on various exchanges and an influx of upcoming Initial Public Offerings (IPO) interests being registered. A company’s financial ratios have to be outstanding before investors will take a second look and uncover its hidden assets and be invested in its growth story.
In this article, I am going to share with you how I quickly decide if the stock you are looking at is worth your time to perform an in-depth analysis or if you should let go and move onto another stock instead.
Select Country, Exchange and Sector to narrow down selection
Add Criteria: Industry, P/E ratio
Why I chose Industry as a criteria
is so that the P/E ratio selection that follows will be applicable for the
selected industry. The results might be skewed if the industry is not set in
place as different industries have different industry P/E ratio.
Next, select the P/E ratio option and narrow the P/E ratio range to the mid mark.
The reason for using the mid-mark as the cut off point is because generally a higher P/E ratio can indicate that the stock is being over-valued. Also, a higher P/E ratio means investors expect higher earnings and it also implies that many are chasing this stock. I personally do not like to chase the stocks that are “hot” or trending at the moment because I see it as a “bubble” that will burst once the craze is over.
Once the instruments are collated for the different industries, I will input them into my template with more detailed ratios and criteria where I will perform a detailed investigation for each company.
Know of any methods other than the
above? Do share with our fellow readers so we can all learn from one another!
Feel free to share in the comments section.
Andronika is borderline mental. To prevent causing distress to those around her, she has decided to set up this personal blog as an outlet and connect to like-minded people. When she is not working on her blog, you can find her with catching up on her never-ending summer reading list, working on her barre moves or taking a siesta.
Privacy & Cookies Policy
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.