A number of indicators and criteria for investment opportunities - Part 2

ROE Rating How investors evaluate the profitability of the equity shareholders to be able to see a possibility of capital create as many words and the percentage of its profits to decide investment company X this without investing in another company Y has the same industry? ....ROE RatingHow do investors assess the profitability of shareholders' equity to be able to see a possibility of capital create as many words and the percentage of its profits to the company investment decisions X without investing in another company Y has the same industry?.We looked at EPS, which is closely related to the determination of the profitability of the company on a stock that investors buy into. This index does not reflect accurately the profitability of the entire equity capital outside shareholders but shareholders as capital stock may also include retained earnings of the business development fund , differences in release ... Quite accurately reflect the possibility that's ROE (return on equity) value expressed as a percentage (%).The value of ROE is calculated as net profit (net income) in the accounting year (from January 1 to December 31) after paying dividends to preferred shares receive dividends but before payment of stock News to common stock divided by total capital owners, ie the net assets (see all NAV index is?) at the balance sheet.This index is the most accurate measure do you evaluate a shareholder's capital and accrued leave (possibly retained earnings) creates much the same words. Since then, investors have the basis of reference when deciding to buy company X or company Y has the same industry together.The higher ROE companies demonstrate effective use of shareholder capital, this means a company balance harmoniously with the same equity loans (because if the borrower shall pay interest reduce profits) to exploit its competitive advantage in the market to increase sales, increase profits.This ratio helps investors evaluate companies in the following angles:* When the company ROE rate equivalent to interest on bank loans (about 10% / year), the level of relative evaluation, please review the profitability of this company because if the company does well only profitable at this level there will be no borrowing companies profit from bank loan sufficient to pay interest on bank loans. Of course in this case just put the company has bank loans.* The company achieved higher ROE interest rate on bank loans, you should find out if the company had bank loans and fully exploit the competitive advantage not to market the company can evaluate the potential increase this practice or not in the future. If there is expanding market share need more capital, loan capital and the company can still be profitable after paying interest on these loans range.However, in addition to loans to pay principal interest was so greatly affected the liquidity factor in the company, so the balance of debt and equity is also the problem of corporate management.* In addition, this ratio also helps investors evaluate companies in the same industry for the investment decision to select one of the same company that occupation, mode selection is of course ROE ratio is high, as noted above, the higher the company's ROE is likely to increase competitive advantage, the stronger, then the competitive advantage of other companies will be reduced.Analysis Yield index for securities investmentCurrent Index Yield (Rate of return on their stock price) is a tool for investors to decide for themselves should choose to invest in enterprise? ...Current Yield Index (Hay Yield is often called) is what? This is the index used to reflect the relationship between the investor dividends received from companies with stock prices that investors buy into it is the ratio of dividends to shareholders receive securities on shareholder wealth purchases- Analysis of the relationship between the investor dividends received from companies and prices investors buy shares, we find the following two cases+ Case 1: If investors buy the stock finished up the stock price and wait to enjoy the difference is called capital gain (capital gain), then investors will not care that much to Yield. Yield at this time had no idea what's really important to them compared to the P / E, EPS as mentioned in the previousIn this case, investors have analyzed the relationship between Yield and EPS. If Yield low, high pressure, they expect the company to use the profits to reinvest profits to increase next year to help P / E decreases. Now they can easily sell stocks with high P / E for capital gains+ Case 2: If investors buy the stock to long-term investment (such as to make your purchase) then of course they are interested in profit annually, quarterly. Now, only dividends they earn. When the Yield is the main target for their interest.When high dividend companies think is no need to use retained earnings may be due to: loan companies use the company has no plans to expand production or market saturation company. When it does not profit is expected to increase much in coming years means P / E does not lead to much reduced investors do not expect to increase their stock price in the future.Usually the profits earned from the company to pay lower dividends than the profits earned from the sale of stock. For example, companies Refrigeration Electrical Engineering (REE) from the date of equitization far dividend investors get only 283% of par value shares (one hundred thousand dollars) while increasing the share price is 1350% mean increase 4.7 times. So for investors on the stock market is that their only concern is that capital gains in Congress every year to winter c drive dividend decisions, they usually vote no dividend more.In short when investing you should understand and evaluate all kinds of index analysis to have a more holistic look at the relationship of these indicators of laying out the investment decision is correct. States after we will help you to drill further analysis of the relationship between company assets and property to your shareholders do not confuse the external surface and that the true nature of assets within the company.Index NAV (Net Asset value) is what? NAV calculation and evaluation of an objective indexNAV index is closely related to the valuation of assets and property company shareholders. Since then, investors will not be confused between the surface and the outside world in the true nature within the company.Normally capital by companies constitute the main source of shareholder equity and loans. The funds now generated for the company assets such as machinery, factories ... and other current assets khacphuc for daily business operations of the company. So have at equity companies (also called charter capital) expressed low external assets may not be large, which is formed from assets contributed equity which may in part from loans . Sources of shareholders equity is called net asset value of the company, this value is an indicator of NAV (Net Asset Value).Net Asset Value NAV including Equity (capital) capital formation from retained earnings. Capital gap by issuing shares to the public higher denominations (Share Premlum) business losses in reserves and reserve development.People often use the indicator NAV / Share (net value of each share issued) to evaluate the book value of stocks and buying shares in this index is calculated by dividing the total equity value (total assets less any intangible assets all debts except bonds and securities is entitled to priority) divided by total shares issued.This index helps investors evaluate companies to invest in some aspects as follows:- Assume that the company has a face value of 100,000 which is 120,000 such NAV, it means that companies have to produce and accumulate capital could profit from the difference to the release ... Thus, investors buy shares for $ 120,000, they would still buy the same true of real value on its books.- If the NAV is 120,000 but the company profits high gain, the investor can buy shares at NAV higher than expected profits to increase as it will have a cumulative dividend and NAV will continue increased again in the future.- If the NAV is 120,000 VND but companies are still holes that will further reduce the NAV, you have to buy with no VND 120,000 or higher. This is a difficult decision and it risks depend on the assessment of investment analysis of companies in many aspects of accurate information about the company to decide the future. here only a simple rule that investors accept that investment is "high-profit high risk".In summary NAV is the most conservative measure for investors to decide to buy shares of a company's real value of the company. In fact the most attention is a matter of "profit" is always top priority because it is the main basis for assessing the profitability of using the company's capital.