What technical / fundamental factors u look into b4 buying stocks? Mind describe more...

Is ROE important? How much is good? But, I see many low ROE in bursa, price continue climb '

This post has been edited by hotguuy: Apr 21 2020, 08:33 PM

P/E

P/E , Enterprise value, eps, ev/ebitda, market cap, net profitt

Always see business prospect first.

Roe, pe and technical etc mostly are laggard indicator.

let's be practical here, it depends on whether you are an investor or speculator. most people started out as speculator first and pay the expensive lesson then learn to be investor. if your idea of trading is profits within timespan of days to 1 month, dont bother spending time looking at these stuff, go with the trend.
if your looking at timeline beyond 2 years, then spend time looking at stuff others has described here. From the annual report you can get a feel for the business

fundamentals only works when shit hits the fan. in our current mkt condition, nobody cares about fundamentals when everything is goreng. You can see good analysts being ridiculed daily.

The rule i use b4 buying stock is to know my stop loss price and my target price before i buy and STICK to it. those prices are continually adjusted if price goes up

When prices climb, I always ask myself whether there's really value in it, or just pure speculation or extreme optimism in the company's future prospect (Tesla for example, Topglove and glove stocks in general). Ok, Tesla is different in this case because they have tangible and real products on the road. But, see Duopharma/Pharmaniaga recent spike, you will get what I mean. Not being skeptical at all, just saying haha!

While not discounting the fact that most countries may still have high demand of glove supply, does the increase of such demand justifies the increase of the share price, up till so much where the company's worth is jacked up >1000%? (supermax)

Anyways, back to your question, I personally like to look at a few places first (in summary):

1. Earnings per share (to determine whether a company is growing):
- positive for last 5 year?
- increase/decrease/stagnant for last 5 year?

2. PE ratio (to determine whether a company is under/overvalued compared to peer)
- if Tech stocks, then this would not be so much applicable

3. Balance sheet
- Current asset > Current liability? (rough guidance)
- Cash & cash equivalent/borrowings ratio (higher=better)
- Book Value per share (tangible net current assets over total outstanding shares) to whats the company's tangible worth incase liquidation, just a rough value indicator as well

4. Cash flow statement
- Operating (i like to see positive, and if better, higher than previous years)
- Investing (I like to see acquisitions, not so much on disposals)

5. Net Income (from P&L)
- Not really my favourite, because got mix Depreciation & Amortization which are non-cash item, so can just keep that in mind

6. Google search
- Very underestimated tool
- See 2 pages if there are any scandal, recent share dilution, or Rights Issue, I personally don't like those
- Background research of the management/leaders, CEO and chairman etc. (could be harder for smaller cap companies)

7. Analyst Report (from i3investor, or from investment banks)
- This is Target Price report written by Analyst
- Take the TP with a pinch of salt, but you can read their analysis because those analyst have been in the field for quite some time
- Their valuation (DCF/DDM/EBITDA/EV multiple etc.) may reflect their own assumption, but it should give you some depth if you are hardworking in comparing them in a spreadsheet

Not sure if I've missed any because I usually look at Annual Report the most when it comes to my initial homework. Then I stray off to forums/online discussions where there will be lots more information from people that may have better understanding of the company (take every comment with a pinch of salt).

I'll link my YouTube video on How to read annual report for stock analysis below (lowkey plugging)

Just my 2 cents worth of comment. Hope it helps.



This post has been edited by Ziet Inv: Aug 2 2020, 12:18 AM

I will get in my car and go see the company. Has not failed me so far

Depends on industries. Telco stocks and healthcare stocks are usually with high p/e ratio.

Do you mean you will go and have a physical look at the company. Interested to know. Mind to elaborate further?