Monday, April 26, 2010

What are the most important statistics to look at when buying stocks?

on Yahoo! finance there are a number of stats listed for every company. what are the important ones to look at when buying stocks?

What are the most important statistics to look at when buying stocks?
history is history, but what else do you have to project future? I myself depend so much on historical data in analyzing stocks. as long as its fundamental values remain intact, the data can be representative.





1-As much as possible, look for it annual report. its importance can be explained here,


http://www.stock-investment-made-easy.co...





2-then only extract relevant data for further analysis:


i) - Liquidity Ratio - How much liquid asset that the company have.


http://www.stock-investment-made-easy.co...


ii) - Efficiency Ratio - An overview how its sales perform.


http://www.stock-investment-made-easy.co...


iii)- Gearing Ratio - Its susceptibility to get caught in heavy debt in case of economic crisis.


http://www.stock-investment-made-easy.co...


iv) - Profitability Ratio - How lucrative their product is.


http://www.stock-investment-made-easy.co...





Happy Investing!
Reply:Most ratios are historical values, and the future may be different. But of the Yahoo statistics probably the valuation ratios, the debt to equity ratio, the operating margin and the gross margin calculated from the income statement. Its really the trends that matter.
Reply:In order to accurately answer that question you need to determine your investment strategy. If you read about the well known investors (current and past) you will find that the statistics they used in stock selection vary. For instance some put a lot of value in p/e. Others completely ignore it.





I do not put too much faith in any particular statistic for buying stock. I tend to use them more to weed out stocks I'm not interested in buying.
Reply:Statistics aren't important at all. What is important is will the company grow in the future. That depends on their products, the market they operate in, and most importantly, the management team. Warren Buffet looks at those three things before he invests.

dr teeth

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