Below are the parameters that I check before investing in a stock:
Market Cap (in Cr)
Category of stock (Fast grower, slow grower, cyclical etc)
Current PE (<40)
Median PE
Long term chart pattern (up/down/sideways)
Stage analysis (1,2,3 or 4)
Sales growth (CAGR 3years>12%)
Net Profit growth(CAGR 3years>10%)
Debt to equity < 0.7
Retail Public Holding < 25%
Promoter holding <=75%
PEG ratio < 1.5
P/B < 1.5 (for B2B)
Gross Profit Margin (steady)
Operating Profit Margin (steady or increasing)
Interest coverage ratio (>5)
ROE (>15% (3 years))
Share price graph (upward)
Promoter pledge(<5%)
Revenue growth > 10% (over 5 years)
45<RSI<75 (RSI<30 means oversold, >75 means overbought)
ROCE (>20%, 3 years)
EV/EBITDA (<22)
CFO/EBITDA (60% +)(Check for 1,3,5 years)
CFO/PAT (>90%,higher the better)
Contingent liability as a % of net worth/equity (<5%)
Concalls conducted regularly
Goodwill as a % of total assets (<20%)
Auditor’s report : Clean?
Company misallocating capital?
Dividends paid regularly?
Micellaneous expenses as percentage of other expenses (<6%)
Auditor resigned?
Total asset turnover (last 5 years)
Net fixed assets turnover (last 5 years)
Estimated revenue growth
Discrepancy in remunerations of the management
Trade receivables as a percentage of sales (<20%)
Working capital days decreasing?
ADX (>25 on Tradingview)
Vstop (Green, upwards (Weekly/Monthly) on Tradingview)
Relative Strength (RS > 80 on Market Smith)
Read Valuepickr thread
Regarding promoter holding, reasonable holding indicates confidence by the promoters in their company. There could be exceptions though. Dividend being paid regularly indicates good intent of the management towards the share holders.
Last year I discover kei but it was pledge by promoter and holding also less than 40 so I avoid.i don’t think how was the great business that company,so I miss the 4x stock.just for a wrong theory.
Having philosohy and approach to study the business of a stock is more important than just viewing those finanacial metrics and ratios in isolation. So probably try drafting your own Stock research methodology is helpful
Trends tell more stories than just a figure.
Analyze the Character of the business like Profitability, scalability, Ways the company does cash generation and consumption
Sir which sources used for management analysis. Bec in some anual reports not given more details. Google and linkindin and Wikipedia pe bhi information ni milata hai. To kaun sa sources used kre?
You can get management’s remuneration in the annual reports. Also, auditor’s analysis about the company can be found in the annual report. You can also track promoter’s holding on Screener. It (high promoter holding) is also indicative of the trust that the promoters have on their company. If for a company, the aforesaid information is not available easily, then it may need further investigation or it could be a sign to move onto a better company from the same sector or otherwise.
I’m excited to share Screener Specter, a Chrome extension I’ve developed to enhance our experience on Screener.in. This tool provides real-time data, adds a forensic summary to company pages, and simplifies complex financial metrics, making stock analysis easier and more insightful.
I’d love your feedback and suggestions to improve Screener Specter. Your insights can help make it even more valuable for our community.
You can have a look at their track record and education. But its not possible to read about management a lot of times for smaller companies. Sometimes its also implied in the Speech and aspirations while it also reflects in the commitments and ACTIONS doe by them.
So there are some direct and indirect wyas as well. I rely on indirect ways more than direct.
