<- Blog Home

How to value stocks

Valuing a stock is very difficult process. There are many things you need to keep in mind when you value a stock. You need to do SWOT (Strength, Weakness, Opportunities, Threats) analysis of the business.
Here is the list of important parameters.

  1. EPS - Earning per share
  2. PEG ratio should be less than 1
  3. Debt to equity ratio should be less than 1
  4. Holding pattern - Promotor and Institutional Holdings should be high
  5. Positive cash flow
  6. Constant equity capital
  7. Return on equity
  8. Financial Reports
  9. Management and promoter honesty
  10. Competition
Complex problems, Simple Solutions