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Important ratios for stock analysis

Important ratios for stock analysis PE ratio:- PE ratio also known as the price to earning ratio and very famous between the investors. Investors use this ratio with other ratios or data to find out undervalued stocks. Read more Important ratios for stock analysis Earning per share:- In simple meaning it means “distribution of company’s profit between each shares” it can be used as the indicator for determining company’s profitability. It is best to use PE ratio and Earning per share comparatively. Return on Assets:- Is company using its assets effectively to generate income, yes or not? This ratio tells us the truth. This ratio gives us idea about management efficiency or capability to run company profitably. It compares company’s earnings as compare to its assets Dividend payout ratio:- It means “amount of dividends paid to stockholders relative to the amount of total net income of a company” Dividend payout ratio = Dividends / Net Income. Retention Ratio:- What c

My Investments and COVID-19

Everyone has witnessed huge market decline in the month of March when our PM Narendra Modi suddenly announced lockdown to tackle covid pandemic. Sensex stock market index reached all time high of 42273.87 in January of 2020 and from there it fallen down to below 26000 pts, nearly 40 % down. And from there it started healing. My Investments and COVID-19 Before this great fall my all investments were in undervalued stocks with very low P/E multiple, attractive earnings and exciting track record. Thanks to this quality stocks my own portfolio fall nearly 22 %. Although my 22% of capital vanished, I feel very delighted my portfolio beaten the market index(Sensex down nearly 40%) with significant points.  In the last year of your college generally you are not backed with huge capital support, and your capital is very limited. So securing capital is my first priority. Back on the track, I sold all the stocks with 22 % capital loss and secured rest of the principle capital

PE ratio and Its analysis

Introduction:-  PE ratio also known as Price to Earning ratio and is the most popular ratio among the investors. They use this to identify undervalued or overvalued stocks. By using it investors enhance the area of margin of safety and secure their investment. How to calculate PE ratio? PE ratio = market value per share / EPS(earning per share) Examples of calculation Assume:- Market value per share = 40 EPS (earning per share) = 12 PE ratio = 40/12 = 3.5 Market value per share = 40 Earning per share = 5 PE ratio = 40/5 = 8 Best beginners book on share market PE ratio and Its analysis How to use it? Or PE ratio using tips:- Lower PE ratio is better than higher PE ratio for selection of stock because low PE mean high earning per share and high PE mean low earning per share. And we need high earning per share. Stock/share’s PE ratio compare with other same industry’s PE ratio. If both companies market cap nearly s