Friday, February 26, 2016

Research before you buy a Stock




Everyone who advises about investments  preaches that investors should do adequate research before they spend their hard-earned money on a stock. Unfortunately, this has been hard to do, at least till recently. By and large, Indian companies are stingy with information and the inputs that investors need to select, reject or monitor a stock are hard to come by in a convenient package.
 It gives the longest history of the stock price to insider trades, key ratios, detailed annual and quarterly financials, links to news, articles and opinion about the stock, and much more about each stock means that whatever you need.
All you need to do is to type in a few characters of a company's name in the  site’s  search box, and click on the name that pops up.
What is the company, and what's happening with it?
At the basic level, if you know nothing about a stock, you could just look at the sector and the industry name that are given at the top. However, you'll probably need some more subjective information than just that--and a roundup of news and events. For that turn first to the 'Review and Analysis' section, which has Value Research articles of relevance to the stocks, and then to 'News & Announcements', which are the company's own releases to the stock exchanges.
How has the stock price been doing?
At the top of the page is the latest snapshot of the price, along with key numbers like PE ratio, market capitalisation, high-lows and related numbers. The price graph on the stock page is the most comprehensive one that you will find. Not only can you look at the stock in isolation, you can also compare it to indices and other stocks. By using the search box given, you can add any stock. Add the facility to zoom down to any date range, there's nothing else to be learned about how has the stock been doing on the markets.
How have the stocks key ratios progressed?
For a very quick overview that sums up many aspects of how a company is doing, there are few better options than taking a close look at five years' worth of the three most crucial ratios of Revenue per Share, Earnings per Share, and Return on Networth. Accompanying these graphs, are tables of key financial growth numbers under 'Annual Ratios' and 'Interim Growth Ratios'. These give a numerical overview of how Sales, Profits, EPS and margins have progressed.
Who else invests in the stock?
Take a look at how mutual funds have been treating the stock. This can be done in a unique table of which asset management companies have invested in the stock, and how the level of this investment have progressed over the last couple of years.
How does the company compare to its peers?
For seven key numbers, both financial and stock-related, there is  a comparison with selected peer stocks. This provides a quick overview of where similar listed companies are in comparison to the stock you are studying.
How are the companies' financials?
Of course, far above every other piece of information about a stock lies the importance of the financials. Understanding financial numbers as well as their changes is the heart of stock selection. There is an  in-depth view of financials, annual as well as quarterly, consolidated as well as standalone, for up to six years, as well as trailing twelve months. With 59 heads of information across eight periods, this is an excellent tool to assess the  depth of financial data.
Who Owns the Company?
Have the promoters been pulling out? How much do DIIs or FIIs own? Broad shareholding pattern for five years shows you who's in, who's out, and where they're going.
What is the company's own view of its prospects?
Of all the information that an investor should absorb, the director's report is the most widely ignored one. Granted, this document will try to put a positive spin on everything, but even knowing what spin is being put on can be of great value to investors.

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