Stock Analysis-Beginner Investor
Stock analysis for many beginner investor, investing in stock is like investing in your own business. Value investing management is indeed needed in analyzing a company stock when you have decided to purchase their stock from the point of view of stock analysis in stock market trading.
For stock investors, investing in a company involve many other factors such as the balance sheet, cash flow and debt their are getting in because it is a reflection of what the company owns and owes. Investors should focus on the company balance sheet that mainly consist of asset performance, working capital and the structure of its capitalization. These contain the investment quality of one’s company posses and practice, in short it is the strength or it is the crucial point an investors should look for the company based on their balance sheet in your stock analysis skills.
Stock analysis-Working Capital
Stock analysis including also a working capital measure of both a company’s efficiency and its short-term financial health. Some will also considering their debts in a longer term of time frame. If things turn bad, the company can declare bankruptcy. Working capital also gives investors an idea of the company’s underlying operational efficiency or market efficiency.
Stock analysis-Asset Performance
In this segment, we’ll look at four evaluative perspectives on a company’s asset performance:
(1) the cash conversion cycle,
(2) the fixed asset turnover ratio,
(3) the return on assets ratio and
(4) the impact of intangible assets.
The Cash Conversion Cycle
The cash conversion cycle is sign or monitor to a company capital strength in overall. In addition, the cash conversion cycle is a very important element in stock analysis as it is the key element to how to measure the company’s ability to efficiently manage its important assets.
The Fixed Asset Turnover Ratio
Fixed asset is an important asset to a company. A company turnover ratio of the fixed asset determine the performance of the company itself which related to the profit making of the company.
The Return on Assets Ratio
Return on assets (ROA) is expressed as a percentage of return by comparing the company income. In a third party analyst company, usually they will have it calculated using formula. But if you want to calculate on own-self, you can find the formula online and just input the figure into the formula.
Intangible assets are assets that cannot be see normally and also consider as non physical properties as norm. These intangible assets is hard to measure as it does not have a fixed formula, however, an intelligent investor will know how to evaluate these intangible assets based on their stock analysis experience or you can just estimate it.
I had listed down some of the basic fundamental rules that you can follow when comes to stock analysis. Hope this simple yet informative insight can help you in your stock analysis. Practice make perfect.
- Earning per share
- Stock chart analysis
- Stock analysis software
- Past history in company’s earning track record
- Research on the company
- Look at the sales of the company, at least 6 months
- Return on equity
Stock Analysis with the help of professional tools will help to minimize the mistake and wrong estimation that human being do. A trusted and reliable best online stock trading will help you perform well in your investment portfolio. Most of the software offers data and financial statement of stock analysis to their users to access so that they can gain insight value of the company they are looking at.