The Complete Checklist to Invest in Indian Stock Market |
Posted: July 16, 2019 |
To earn consistent returns for years, it is essential to select a winning stock. But, this requires lots of research and analysis. To help you simplify the research part, here we share with you an investment checklist through the way of this post. With the help of a reliable checklist for the pricing stocks, you can decrease your chances of making a wrong decision and missing out on a vital piece of information. If you choose the best stock advisory in India, is the checklist to let you improvise while you invest in the Indian stock market. Check What the Company Do Before you invest in stocks of any company, you must research about the company’s services, products, and offerings. It is important that you understand the business model of the company. In addition to this, you must learn how the company is actually making money. Gain knowledge about the best or top selling products of the company. Check How the Company is running Next, you must check about the owners and promoters of the company. Find out whether the company is owned by a family or it is managed by professionals. You must gain knowledge about the management of the company as this can greatly affect the stock prices. Moreover, check the background, credentials of CEO and Board of Directors of the company along with its shareholding pattern. Check the Company’s Profitability Status It is really very important to know the profitability of a company in the last couple of years. Check the gross and net profit of the company for the past few years. If a company is growing well and has been able to sustain in the stock market with a good profit margin, then buying its stock can be lucrative in the future. Check the Competitive Advantage of the Company This one is related to whether the company has intangible assets or not. Furthermore, you need to check the customer switching cost, competitive advantage, and network effect of the company. This is important to know as if a company is in a better state; it will keep the competitors away from grabbing away their profit share. As a result, it would be profitable for you to invest in its stock. Check the Company’s Reputation Being the best stock advisory in India we would suggest checking the reputation of the company beforehand. It is vital to know whether the management or promoters of the company involved in any of the past scams or not. Make sure that you purchase stocks of a company that has no history or past records of cheating its shareholders. Also, the company must be free from a past penalty by SEBI. Check the Balance Sheet of the Company If the assets of a company are growing over time, it means that it is in a profitable state. But this is not the only part to check or assess. You must also research the liabilities of the company. The equity of shareholders must be increasing. Additionally, have a glance at the inventories, intangible assets, payables, receivables, and other aspects of a company before you finally purchase its stock. Check Key Competitors The Indian stock market is not only versatile but is highly competitive too. There are various direct and indirect competitors of a company. In order to make a profitable investment, you must check the key competitors of your preferred company. The company you are investing to must go in line with its competitors. Also, if it has global competitors then check for their market situation as well. Check the Debt Status of the Company Most importantly, there are various companies in India who are running high in debt. Some of them are big names. Therefore, to avoid losing your money in the Indian stock market, you must buy stocks of a company that is free from short-term and long-term debts. The company you select must generate enough profits as well as a cash inflow in the present and future years. Check the Way Stock is Valued Last but not least, it is essential to assess the actual intrinsic value of a company. Check that whether a company is under-valued, over-valued, or decently valued. There are various ways to measure the intrinsic value of a company. Check its margin of safety so that you don’t overpay for its stock and end up making losses in the future. Though you can always take recommendations and investing ideas from experts, in order to earn consistent returns from the stock market in India, you must build a viable investment strategy. With this investment checklist, you can definitely reduce your chances of investing in weak stocks. Most importantly, you can easily assess the present situation of a company and therefore make a wise decision. So, do follow this checklist before investing in the Indian stock market to make a correct decision right from the beginning.
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