How to analyse a stock
1. Company and its industry
2. Management and its business model
3. Fundamentals
4. Growth
5. Valuation
Company and its industry
2. Milestones of the company.
3. Subsidiary of a company.
4. Share holding of a promoter.
5. Share holdings of FII.
6. Share holdings of DII.
7. Extra information such as numbers of employees and their salary, management salary, CSR expenditure etc.
Industry
1. Size of industry.
2. Expected Growth.
3. Level of competition.
4. Concerns in industry.
5. Is it’s a sunrise or sunset industry.
6. Extra information.
Management
1. Management talks ( strength, weakness, opportunities, threats, mission, vision, outlook of a company)
2. ROE ( which is good when it is more than 20)
3. ROCE ( which is good when it is more than 20)
4. ROA ( which is good when it is more than 10)
Business model
1. Break up of sales.
2. Geographically wise break up.
3. Turnover composition.
4. Geographically revenue break up.
5. Major clients.
6. Some extra information.
Fundamentals
1. Market capitalisation.
2. Balance sheet.
3. Current ratio.
4. Debt to equity.
5. Interest coverage ratio.
6. P&L statements
7. Contingent assets and contingent liabilities( balance sheet).
8. Debtor days.
9. Extra information.
Growth
1. Physical performance.
2. Sales Growth ( 1-5 years).
3. Profit Growth ( 1-5 years).
4. Share price Growth ( 1-5 years).
Valuation
1. PEG Ratio.
2. P. B Ratio.
3. Intrinsic value formula.
# intrinsic value formula:-(2*G + 8.5) * EPS
Where G stand for growth(5years)
EPS stand for earn per share
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Thank you for reading
Good analysis
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