facebookWas looking at different stocks in the market. What kind of information should I be looking for when I want to do mine own diligence before deciding which one to put in? - Seedly

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Anonymous

25 Aug 2020

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General Investing

Was looking at different stocks in the market. What kind of information should I be looking for when I want to do mine own diligence before deciding which one to put in?

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Lum Jun Xiong

25 Aug 2020

Banking and Finance at Nanyang Business School

Business Model is important. How the company makes money is what drives the stock price. And the potential growth of the company and the industry its in. Other than business model, you can analyse its cashflow as cash is king. It tells you a better story which businesses is making money in terms of cash.

Hello! Here are some of the financial ratios that you may want to look at when deciding which stock to buy!

1) Price/earnings ratio

The P/E ratio would be able to tell you the dollar amount that an investor can expect to invest in a company in order to receive one dollar of the company's earnings. It will also be able to tell if a company's stock is overvalued or undervalued.

2) Beta

The beta is used to measure the volatility of a company's stock. A beta value of more than 1 is considered high which means that it is likely to be of high risk. While any value lower than 1 would be considered low, meaning that it is likely to be a low risk.

3) Dividend

Looking at the dividend rate may also be a good idea if you are looking for a stock that will enable you to make money without constantly watching the stock market.

Hope this helps!

Ruzaini Rashid

25 Apr 2019

Blogger at Theasiancontrarian.com

I would recommend developing a framework on how to identify an ideal investment based on your risk p...

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