Hi my assignment is due like TODAY.
I need three simple criterion to evaluate whether it is good to buy shares in a company. So far I have the profability of shares, the potential for a share to be blue-chip but I am lacking a third.
I'm stuck because I have already evaluated the varying stock prices twice in two different ways, is there anything else I can do? I also looked at the volatility of the market in blue-chip criterion
HELP! What else can I use?
Here are some criteria I consider.
Has the company steadily increased its sales and EPS?
Is the PE in a reasonable range?
What kind of future does this company have?
Okay. Thank-you. Quick question though, what are the EPS and PE?
Oh, my! You need to learn these abbreviations if you're taking an econ class and studying the stock market.
EPS = earnings per share
PE = price earnings ratio. That's the price divided by the earnings. For instance, a PE of 18 means that stock purchasers are paying 18 times the earnings for a share of that stock.
Okay I have the EPS as earnings per share but is PE price earning ratio or private equity?
Okay, thank-you for all your help! I think I'll use the PE
When evaluating whether it is good to buy shares in a company, there are several criteria you can consider. Here are three additional factors that you can use to assess the investment potential of a company:
1. Financial Health: It is crucial to examine the financial statements of the company, including its balance sheet, income statement, and cash flow statement. Look for factors like consistent revenue growth, positive net income (profits), and strong cash flow generation. A company with a solid financial foundation is more likely to be a good investment.
2. Competitive Advantage: Assess the company's competitive position within its industry. Look for factors such as a unique product or service offering, strong brand recognition, patents or intellectual property rights, or a large and loyal customer base. A company with a sustainable competitive advantage tends to have higher growth potential and a greater likelihood of providing value to shareholders.
3. Management Team: Evaluate the quality and track record of the company's management team. Look for experienced executives with a clear vision for the company's future and a proven ability to execute strategies successfully. Consider factors such as their past performance, leadership style, and alignment of their interests with shareholders. A strong management team can significantly impact a company's success.
Consider conducting research and analyzing information using reliable sources such as financial news websites, company annual reports, and analyst reports. It's essential to make informed decisions by combining these criteria and understanding the specific circumstances of the company and the market it operates in. Good luck with your assignment!