If you're like most stock market investors you've struggled with finding the most effective stocks to invest in.
There are several methods to find a very good stocks to invest in. But first you will need to decide what method is best suited for you.
Basically there are two main types of stock market investing
1. Purchasing growth stocks
2. Purchasing value stocks
Growth stocks are companies which can be growing fast in earnings. There are a lot of advanced and medical growth stocks.
Value stocks are stocks which can be undervalued because they trade at a cheap set alongside the company's fundamentals (i.e. earnings, dividends, sales etc...)
Growth stocks generally will fatten your banking account faster but there is more risk whereas value stocks will generally grow at a slower more sustainable pace but probably won't give you ulcers.
Here's what some investors try to find in a growth stock (based on my knowledge of the National Association of Investors Corporation (NAIC) criteria): https://www.scamrisk.com/best-way-to-invest-5k/
1. Strong Earnings Growth - either quarter to quarter or year over year
2. Strong Forward Earnings Growth - analysts estimate what earnings will soon be for the following quarter or year, should they estimate growth that's a plus.
3. Profit margins - you'd prefer the business to be making a large amount of profit to sustain further growth
4. Return On Equity (ROE) - try to find growth in ROE or a reliable ROE
5. Doubling in 5 years or less - you'd choose the stock to double in 5 years - look at what the analysts estimate for price potential.
Also here's what some value investors try to find:
1. Shares price below intrinsic value
2. Low Price to Earnings (P/E) ratios
3. Price to Earnings Growth (PEG) ratio below 1 is good
4. Stock price is significantly less than tangible book value
5. A debt to equity ratio below 1
6. The company's assets should be more compared to company's liabilities by at the very least a factor of 2
7. Dividend Yield within 1/3 of the quantity of the AAA bond yield
8. Earnings growth of at the very least 7% annually for days gone by 10 years
You will find all sorts of different ways to find a very good stock to invest in but this would offer you a starting point.