Approch to grading of stock

Hello sir

pl reply

please reply criteria or approch for grading of stocks .

and also mention grading of of stocks growth .



Hi Dr Vivek,

There is no one way of grading stocks. There are multitudes of ways, and sub-ways to value a stock and decide whether it is investment worthy or not. Each ways of deciding whether to buy a stock or not requires a different way of thinking and analyzing stocks.

I follow a sort of growth investing, and I look for last 3 yr ROE, ROCE (> 20), last 3-5 yr sales growth, EBITDA growth, NP growth, PE, P/S, P/Cashflow, OP margin, NP margin, Cash Priofit margin, PEG ratio, Dividend payout ratio, Dividend yield for filtering stocks.

Then all I need to track the recent development in the stocks (valuepickr helps me immensely in this regards) and quarterly numbers (thanks to Deepak Swamy’s effort, I can get the summary here at valuepickr itself).

I strongly suggest reading good books in investment like “One up in the wall street”, “The little book that beat market”, “The five rules of successful stock investing”, “Dhando Investor”, “The most important thing” for developing a solid mental framework on stock investing. I find no better way, shortcut than reading these books.

Also the letters of Howard Mark of Oaktree capital, Warren Buffet’s annual letters are worth reading.

I will try to create a PPT with the inter-relationship between these parameters and which one effect in which way, and post it in my blog for all the newbies to understand how to find fundamenatlly awesome stock.