What is the Best Stock to Invest In?

by Sarah Jill General Updates

If you're like most stock market investors you have struggled with finding the Best Stock to Invest In.

There are several ways to find the Best Stock to Invest In. But first you need to decide what method works best for you.

Basically there are two main types of stock market investing

1. Investing in growth stocks

2. Investing in value stocks

 

Growth stocks are companies that are growing fast in earnings. There are a lot of high tech and medical growth stocks.

Value stocks are stocks that are undervalued because they trade at a lower price compared to the company's fundamentals (i.e. earnings, dividends, sales etc...)

Growth stocks generally will fatten your bank account faster but there is more risk whereas value stocks will generally grow at a slower more sustainable pace but probably won't give you ulcers.

 

Here's what some investors look for in a growth stock (based on my understanding of the National Association of Investors Corporation (NAIC) criteria):

1. Strong Earnings Growth - either quarter to quarter or year over year

2. Strong Forward Earnings Growth - analysts estimate what earnings will be for the next quarter or year, if they estimate growth that's a plus.

3. Profit margins - you'd prefer the company to be making a considerable amount of profit to sustain further growth

4. Return On Equity (ROE) - look for growth in ROE or a stable ROE

5. Doubling in 5 years or less - you'd prefer the stock to double in 5 years - look at what the analysts estimate for price potential.

 

Also here's what some value investors look for:

1. Shares price below intrinsic value

2. Low Price to Earnings (P/E) ratios

3. Price to Earnings Growth (PEG) ratio below 1 is good

4. Stock price is less than tangible book value

5. A debt to equity ratio below 1

6. The company's assets should be more than the company's liabilities by at least a factor of 2

7. Dividend Yield within 1/3 of the amount of the AAA bond yield

8. Earnings growth of at least 7% a year for the past 10 years

There are all sorts of other ways to find the Best Stock to Invest In but this should give you a starting point.

Best Stock to Invest in- Pinnacle Research is an Investor Relations company. They discover companies most investors are not aware of and would not distinguish how to find. They recognize that yesterday’s growth is not rewarding for today’s investor. There team thoroughly searches through thousands of financial investment opportunities to find you the untapped treasures. They function closely with our clients to understand and appreciate their financial investment goals and to present them with the details necessary to make profitable decisions. There group believes long-term partnerships are developed through high performance and aim to provide the best service available in the industry.

Sponsor Ads

• Ad Space Available - Rent it Now!

Created on Dec 31st 1969 18:00. Viewed 0 times.

Comments