How to select stocks to invest in Money Tips

Category: Money tips Release Date: 2007-04-02

Adage: select potential than stock picking. This fully shows the importance of stock selection. Good stocks to rally not only to keep up momentum, more importantly, has a defensive play in the fall, increased in spite of. At present in China's Shanghai and Shenzhen Stock Exchange-listed shares is only a total of more than 1,000, and there have also been initial public offering. The face of a large number of stocks, how can we choose to be worth investing in shares? According to China's actual conditions, stock selection should consider the following several criteria:

â‘?excellent performance of the stock.

No matter what kind of market, performance excellent stock rose underlying factor. Therefore, in stock selection choices to make after-tax profit of 0.4 yuan per share, more than 30 times the price-earnings ratio with growth stocks.

â‘?growth is good, performance increments or from the bottom in the stock rebounded.

Specifically those who could be considered outstanding principal operations, performance, growth rate of 30% or more, or is expected to more than 30% of the stock, for the apparent rapid growth stock, its price-earnings ratio may be appropriately relaxed.

â‘?major support from the industry's unique or national stocks.

These stocks are often a higher market share in the national economy played a pivotal position in its market performance is often different.

â‘?company size is small, a higher per-share fund, with expanded disk capacity of the stock.

In an industry, when the scale of the expansion to a certain extent, the growth rate will slow down and become the blue chips remained relatively stable performance. The smaller companies, in order to achieve economies of scale, thus having a share capital the possibility of substantial expansion. Therefore, those equity small, good performance, issue the higher premium and thus a higher per-share stock fund (especially shares) should be the preferred stock investors.

â‘?price compared to its intrinsic value or through horizontal comparison, there is the potential appreciation of space.

In the actual transactions, we should try to select those oversold stocks, as many blue-chip growth stocks are also rising dramatically from the oversold after.

â‘?give due consideration to the technical trend of the stock.

Select those near the bottom (including the stage at the bottom), or just starting stock, try to avoid those who are being oversold to build a head (including the interim head) shares.