While it largely depends on an investor's individual investing style, strategy and risk appetite, some basic tips on early "leakage" detection in a stock may often come handy:-
1. A company's earnings growth potential is one of the most significant factors influencing its stock price movements.
2. The India Volatility Index indicates how the market is expected to move in future.
3. A high free cash flow is an indicator of a company's stability as it ensures that it is liquid and making money from its operations.
4. Loss aversion is a conservative investor's trait, anchoring reduces his ability to invest rationally, and noise investing leads to irrational investing.
5. High-debt companies can be worthy investments only if their rate of return from operations is higher than the cost of funds.
6. Relative strength index measures a stock’s movement by comparing the magnitude of recent gains to recent losses.
7. A top-down investor tends to first look at the economy’s health and then selects sectors that could perform well, while a bottom-up investor is more concerned with company-specific factors than the broader economic or sectoral trends.
8. Shun stocks with too much debt, as they can go into a tail spin, triggering a sell-off.
9. A higher Sharpe ratio indicates lower risks in investments.
10. When correction brings a stock close to its climbing long-term moving average, it is the right time to buy it.
11. A company's low debt-equity ratio helps it in avoiding high interest costs.
12. Look for stocks that have a P/E of less than 10 and compare company's P/E with aggregate market P/E or industry P/E.
13. Avoid firms that have FCCBs coming up for conversion in future.
14. Whenever there is a sharp reversal, buy strong stocks with low P/E.
15. Define your own stock picking strategies by looking for stocks with reasonable trading volumes, their quality disclosures, their operating profits, constant generation of cash flow, and having a ROE above 10%.
16. Understand the macro-economic impact on your stock by identifying changes early for exiting at a good level.
17. Several statistical tools are used to assess the value of a stock, like PE, PBV, PS, DE, AT, ROCE, CR, PEG, ICR, DY, DPR, OPM, NPM, etc.
1. A company's earnings growth potential is one of the most significant factors influencing its stock price movements.
2. The India Volatility Index indicates how the market is expected to move in future.
3. A high free cash flow is an indicator of a company's stability as it ensures that it is liquid and making money from its operations.
4. Loss aversion is a conservative investor's trait, anchoring reduces his ability to invest rationally, and noise investing leads to irrational investing.
5. High-debt companies can be worthy investments only if their rate of return from operations is higher than the cost of funds.
6. Relative strength index measures a stock’s movement by comparing the magnitude of recent gains to recent losses.
7. A top-down investor tends to first look at the economy’s health and then selects sectors that could perform well, while a bottom-up investor is more concerned with company-specific factors than the broader economic or sectoral trends.
8. Shun stocks with too much debt, as they can go into a tail spin, triggering a sell-off.
9. A higher Sharpe ratio indicates lower risks in investments.
10. When correction brings a stock close to its climbing long-term moving average, it is the right time to buy it.
11. A company's low debt-equity ratio helps it in avoiding high interest costs.
12. Look for stocks that have a P/E of less than 10 and compare company's P/E with aggregate market P/E or industry P/E.
13. Avoid firms that have FCCBs coming up for conversion in future.
14. Whenever there is a sharp reversal, buy strong stocks with low P/E.
15. Define your own stock picking strategies by looking for stocks with reasonable trading volumes, their quality disclosures, their operating profits, constant generation of cash flow, and having a ROE above 10%.
16. Understand the macro-economic impact on your stock by identifying changes early for exiting at a good level.
17. Several statistical tools are used to assess the value of a stock, like PE, PBV, PS, DE, AT, ROCE, CR, PEG, ICR, DY, DPR, OPM, NPM, etc.