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.

Read More

A number of indicators and criteria for investment opportunities - Part 1

P / E is only reflecting the relationship between the market price (current market shares) shares with a net profit of the company for one year ....
P / EThese indicators reflect the relationship between the market price (current market shares) shares with a net profit of the company for one year.
For example, from the financial statements of Bank A '(ACB). Profit after tax in 1999 of the ACB is 51 564 million, divided by the total number of shares: 151.025 VND. Price stock purchase agreement ACB (unofficial market) recently was 1.7 million, so P / E of the ACB with 1.7 million: 151.025 = 11.25 times.
This index is commonly used as a tool for investors to look through the stock cheap or expensive. P / E higher mean higher stock purchase and vice versa. On the other hand, investors can buy with P / E value for hope in the future company profits high P / E is low at that time as the following example: profit in 1999 of a confectionery company 12.7 billion, P / E of 3.4 and profit in 2000 is 14.5 billion, P / E of 2.9.
Investors buy stocks with P / E of 3.4 times compared with profit of 12.7 billion by 1999. If 2000 is 14.5 billion profit, the investor purchased the P / E of only 2.9 times the company's profits have increased and if the profit increase again in 2001, then this P / E will decrease Also, when the investor wants to sell out to other investors and looking at it to see why investors before purchasing P / E is 3.4 times 3.4 times their purchase also okay. The deal is done! Previous investors sold P / E of 3.4 times (or higher if buyers accept) than the profit in 2000, it means that they sell higher than the price at which they bought in 1999.
The problem is that P / E is formed many times this game, here are two cases occur:
- If the investor accepts high P / E, the risk may be higher due to higher purchase price than the company achieved profitability.
- On the other hand buy high P / E can also be low risk, because then the company may buy valuable companies as Coca Cola or Vietnam Airlines, for example, the company is growing steadily regulations.
Since then form a new amplitude P / E for each company, each industry and each of the market environment. Following the trend on the stock market world, the following areas tend to accept the P / E high (not including powerful corporations): banking, securities finance, information technology telecommunications, biotechnology, manufacturing high-tech industries.
Currently, Vietnam's financial experts receive the P / E market in Vietnam from 8-15 times, which means the financial sector banks or other reputable company, the P / E in the market Vietnam from 10-15 times and other areas may be under 10.
However, you just think, if not profitable company means that negative profit, the market share price divided by earnings in a year which is a negative number, how that have P / E be.
Therefore, the P / E is just a relative number, investors also need further evaluation and other financial indicators related more technical in nature.
EPS Analysis
EPS can be understood simply as an indicator to evaluate the company itself generate profitability from capital contribution by shareholders worth. These indicators directly reflect fully the company's intrinsic ability to generate net income (profit can pay to its shareholders) on a share that shareholders, not from capital contributions up or down the stock price on the stock market. EPS higher profit companies create greater shareholder and vice versa. For example, if reached 5,000 dong per share, then it means that companies make a profit of 5% on shareholders capital (assuming the face value of each share is 100,000).
Thus, if a company EPS was only about 8-9% a year, only the interest rate on bank deposits, you should not buy, that's what you must consider before deciding to invest. If you buy the two cases occurs:
- One that you know and hopefully the next time the company can increase profits due to many reasons such as the company is expanding the market, bringing to market new products, upgrading the effective management more ... This decision reflects a real company.
- Second, you find that the stock market, the psychology of other investors more interested in buying shares of this company may have reasons to be favorite company, business is "trendy "such as the rush of dot com companies (Internet companies) in the world so

Read More

Pick Stock by the method of CANSLIM

Many experts consider CANSLIM is one of the most effective methods from a variety of analytical tools currently stock. "CAN SLIM reflecting the harmony between the basic methods of analysis with technical analysis method investment securities" - John Neff, one of Wall Street's trees, said ....Many experts consider CANSLIM is one of the most effective methods from a variety of analytical tools currently stock. "CAN SLIM reflecting the harmony between the basic methods of analysis with technical analysis method investment securities" - John Neff, one of Wall Street's trees, said.
 CAN SLIM is a collection of seven letters of the first seven factors which William is very effective when value stocks:C: Current Quaterly Earnings Per Share (net income per share of the latest quarter)William noted that most of the good stocks are increasing profits over the same quarter a year earlier and higher rate of increase of stocks proved more promising. According to him, before investors purchase the shares should consider the drastic increase of stock returns, namely the growth of net income per share in last 3 months.But to find out the increase in profit where and how? William said that investors can research the financial statement audit of the company are listed, along with the exploration of other information channels such as newspapers, acquaintances ... It is important for investors to appreciate the reliability and consistency of information, makes it possible something is not right, if the company's revenue increased 20%, while net profit increased by only 5 %.A: Annual Earnings Increases (increase in annual net profit)According ONeil, good stocks are stocks with a steady increase in profits over the previous 5 years. Investors should pay special attention to the stock increases annual earnings stability and achieve over 25%, but should be sensitive to business cycles of each sector and company. According ONeil, this criteria can help you eliminate about 80% of bad stock.To get the exact increase profits, investors should study all relevant information to companies that want to invest. This information includes the history and characteristics of companies, financial situation, the details of the issuance of shares and underwriting organizations share. Investors can find this information in a statement released in the financial statements of the company or from companies investment advisory services. The investment decision should only be given when you've got enough information about base stocks as well as growth in annual net profit.N: New Products, New Management, New Highs (new products, new management, new ceiling price)William's studies indicate that stock prices will be derived from a certain internal factors. These factors are usually the company's new products, new management, new management methods or new ceiling price of the shares on the stock market.Therefore, never redundant if investors interested in this internal factors. Considering that these factors are the stability, no expression of mutations for the worse, then that would be a lot of stocks with growth prospects in the stock market.S: Supply and Demand (supply and demand)In business, the law of supply and demand are influenced greatly to production costs, and investment securities is not an exception. Stock prices are also affected by supply and demand rules. William said that stocks of public companies, large scale, product quality is not always worth buying, because the demand of large stocks, while the supply and prices are usually less was pushed up artificially, does not reflect the actual value of the stock as well as difficult large profit.The number of stocks with low circulating new market has great potential and is likely to increase prices than other stocks with large circulation numbers. It follows that, the shares are held top management with a large percentage of common shares that are highly secure. William particular attention to the company shares and stock acquisition of companies with long-term debt over equity moderate, because he is by the higher rate how many companies will increasingly have to cope with stress much interest in the future much. Investors should compare this ratio in his company plans to invest with the average debt ratio in the company in the same industry, and further analysis is likely to pay more authentic assessment of the the company's debt.L: Leader and Laggard (stocks and shares top lag)According ONeil, market investors should only buy 2 or 3 best stocks in the top group of existing shares, the rest should spend money on stocks with profitability in the future. In particular, investors should avoid buying stocks with high growth but unsustainable, such as share prices follow the trend, according to highlights ... because this stock is considered stocks lag, not sooner or later lose value.I: Institutional Sponsorship (the support of the financial institutions and investment)Financial institutions often invest here is the competent authorities, the government agency specializing in financial investment. These agencies may hold a certain number of shares of certain companies, so that the company will have the support and strong support from these agencies, a very favorable conditions for businesses, causing stock prices soared. However, a large number of financial institutions, investors holding shares becomes unfavorable factors, because it means that supply will be limited by the agencies rarely ever want to sell the stock their votes, pushing the liquidity of the stock is low.M: Market Direction (market orientation)Whether you exactly when comments on the six criteria listed above, but to market-oriented criteria for the mistake you will have to 5 out of 7 stocks you buy will lose value and can make you lose hole. Market factors is important because it strongly influences the stock price. When a batch of the same industry share a depreciating market, the stock price of the company you choose will definitely drop by. Conversely, if the stock price of these companies increased by the development of the stock market, you are also buying into a "following" there are positive indications. Thus, William emphasized the importance of the study of graph stock prices fluctuate daily, weekly and monthly before each stock investment decisions.One of the biggest successes of William is to invest in shares of pharmaceutical company Syntex. This is bold action and daring, in the judgment of the professional investors at the time, by Syntex is a pill maker in the world first. But the results have demonstrated William's decision is correct. Only a short time later, Syntex announced quarterly revenue growth of over 300% and shares of Syntex from where also "anonymous" with $ 100 / share has become growth stocks with price 550 USD / share in less than six months. Thanks to enormous profits from Syntex that William had founded the company money to William J. ONeil & Company itself.George Soros, one of the largest investors on Wall Street, to conclude that: "There is no field which offers fast and large profits by investment securities." There are plenty of people see stock investing is a game hoping to improvise a lot of money quickly. However, the field of this exciting investment seems to be no room for the emotional decision. For William ONeil, like many "trees" others on Wall Street, the stock selection decision should be based on the analysis and coordination between the elements of quantitative and qualitative terms. The key analysis in stocks is to find stocks with the biggest growth potential in the moment you buy them. In other words, you must have the judgment skills, review and analyze problems with the formulation of an appropriate investment plan to determine time of purchase in the stock up and sell weak stocks.

Read More

What is Fundamental Analysis?

Fundamental analysis is the analysis of financial condition and business situation of the investment company relying on the balance sheet accounts and income statement of the company to review the company's quality as the company's development over time, which predict changes in stock prices. The value is the primary goal of fundamental analysis. ...
Fundamental analysis is the analysis of financial condition and business situation of the investment company relying on the balance sheet accounts and income statement of the company to review the company's quality as the company's development over time, which predict changes in stock prices. The value is the primary goal of fundamental analysis.Some analysts often use discounted cash flow method to determine the value of the company, while some people use the price earnings ratio (P / E) ... Thus, if the distribution closely integrated into the technical rules of supply and demand of securities on the market, fundamental analysis goes deep into the internal affairs of the company issuing the securities. The basic analysis will evaluate a stock as value or the current value, and this will confirm the real value of a company with an intimate relationship like with the financial characteristics : capacity development, the risks that companies may encounter; cash flow ... Any deviation versus any real value is also indication that the stock is below or exceeds the value real. Therefore, analysts often see it as a guide for investment decisions in the future. For example, a long-term investment strategy should always cover all the elements of fundamental analysis as:
* The relationship between the current share price and financial factors that can be measured.* This relationship is stable over a long enough period.* The deviation of the relationship has been revised at the appropriate time.
Also a lot of investors are using the basic analytical methods to choose the stock has good prospects but are undervalued market, ie a way of value investing.
If you have decided to play the stock, the investor make an intelligent and prudent. Make decisions based on information drawn not only from technical analysis (supply and demand), which mainly had to fundamental analysis (the capacity and operation of companies). Fundamental analysis to calculate market sales, the index of financial and legal situation and the system of corporate governance in order to find worthy business investment. Technical analysis to find the time to conduct a timely transaction. To pour money into a profitable place, investors need to know all about fundamental analysis and technical analysis can be calculated because the value of shares that do not exactly know where to choose the right time investment, the analysis also becomes meaningless. There are now many investors do not need to know the tools but still investing style is very dangerous chance. In the worst case, it is they who make the market collapse. To market the healthy development can investors need to have knowledge and experience on the stock market collective investment by small amounts prior to the stock liquid before and monitor marketing school carefully before investing large sums.
When fundamental analysis became common knowledge of all investors, the stock market work more effectively: continuous participation of institutional investors makes stock prices more reasonable listing; information from the listed companies have started creating immediate response to the stock price; investors more interested in production and business activities of enterprises and information daily on the market. And when fundamental analysis was the main basis for the price development is "playing" the stock will become the investment of the real financial investment.

Read More