Wednesday, July 06, 2011

Good Stock Pick Strategy

Though there are thousands of stocks in stock market nowadays, not many of them are worth investing. In ever changing business environment, it is not easy for companies to remain profitable.

Worse, hardly any of them have shareholders' interest at heart. That is why, stocks represented by quality companies with effective management team is the key to get a higher investment return
.
A good stock pick should've consider effective management as it is everything in sustainable stock investment. Thanks to financial ratios, picking good stock is just a simple math away.
Above average EPSGR and excellent ROE is my first stock screening criteria to filter rubbish stocks in the stock market. You can choose any figure which you feel comfortable. But, the figure 10 I chose is because:
  • 10 per cent EPSGR shows that the company has reliable high demand products or services.
  • 10 per cent ROE shows that the company are managing shareholders’ fund effectively.
  • 10 consecutive years means the company able to survive the ups and down of the market, business cycles or the ever-increasing competition.
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