The market is based on future expectations, which are linked to internal and external events that we cannot control.
How do I choose a stock that will rise in the medium or long run?
1. Company’s Financial Efficiency
Look at the company’s assets against its liabilities.
2. Company’s Activity
Is the company’s activity something that has a future demand or an activity that is losing its need in the market?
3. Liquidity
Can I sell the stock easily or not? There is no use in having a profitable stock that you cannot sell due to a limited number of traders.
4. Profitability
Is the company profitable? What are its earnings per share and are the profits growing or declining? To calculate the earnings per share, you divide the company’s net income by the total number of shares. Are earnings per share increasing year after year?
This is a good indicator of profitability.
5. Debts
A company’s debts are an important factor when choosing a stock. Stay away from companies whose debts exceed their assets, especially if the debt is being misused.
6. Management and Reputation
Management and reputation are all factors that must be taken into account when buying a share. If you get a chance for a quick profit, there is no point in passing on this opportunity, but don’t rush to sell a good stock at a loss, you are the one who turns the paper loss into an actual loss, in other words, you can speculate on a good stock while investing in it.
Look to invest in the medium and long-term, and another important point is the company’s distribution of profits. Is the company regularly distributing dividends or not?
This was not written by Thndr and this is not investment advice, you should do your own research before making investment decisions.
