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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

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