How to Find Undervalued Stocks That Will Double in Value
When we talk about stocks doubling in value, we are referring to the value of the portfolio as a whole.
It is a matter of experience for any broker or investor, not all shares in a portfolio fare well for all the time.
The best course is to keep a reserve list of stocks that can be immediately introduced into the portfolio, should the market conditions demand to recast the portfolio.
The end objective is to achieve long-term capital growth from a portfolio of undervalued shares.
You constantly study groups of shares you have initially chosen and cherry pick the selective ones, at the right time.
Vibrancy exists at the smaller end of the market, provided one is able to spot it and make the best use.
A good investor knows the art of buying low and selling high.
You can not change the market conditions of your own.
They say, 'if there is no perfect discipline, carry on with the available discipline!' Similarly, if the investment climate is not ideal according to you, make the best use of the prevailing conditions and reap the maximum advantage of the market downturn.
This is the time, when the stocks are available at their all-time low.
Like a good researcher, you need to make sincere efforts to find out the shares that are likely to appreciate fast.
After such estimation, the next step is to gather historical and financial details about those companies.
The important issues that must engage the attention are: Collect historical and financial data about the companies relating to current and future price per share earnings, earning per share for the current year as well as for the previous years (approximately 3-5 years), financial reports, the growth prospectus explained by the management of the company in for ensuing years, the immediate and distant expansion plans, etc.
Perfect time of picking up the shares is important.
A wise investor will not take a grim view of the falling markets.
Rather, one will utilize the crisis to one's advantage, by converting the same for new trades.
You will be able to buy the shares of your choice in great quantities and competitive prices.
In such conditions, the new issues coming into the market will be cheaper.
While continuing with the efforts to find undervalued shares that have prospectus of quick growth, the aspect of diversified strategy needs to be taken into account.
To invest in the shares of the same sector, howsoever bright may the prospectus seem, is not correct; at the same time, this is not a hard and fast rule.
The important criterion is companies must stand the test of fundamental and/or technical analyses.
The ability of the company to generate cash flow and its inherent capacity to grow substantially over the coming years are important.
Look out for companies that have imaginative investment approach.
Those that invest in countries having great potential growth for future, fall in this category.
Also it is prudent to trust smaller companies with dynamic potential for expansion.
But their in-depth analysis is the pre-requisite.
In reality, no cut and dry formula exists and finding out the undervalued shares is not part of the rocket science.
Lean heavily on your ability to do imaginative research and analysis.
You need to look at the historical data of the share, assuming that history will repeat! Can you leverage the power of the share market to your best advantage, while hunting for the undervalued shares? This is the test to the skill of the investor.
It is a matter of experience for any broker or investor, not all shares in a portfolio fare well for all the time.
The best course is to keep a reserve list of stocks that can be immediately introduced into the portfolio, should the market conditions demand to recast the portfolio.
The end objective is to achieve long-term capital growth from a portfolio of undervalued shares.
You constantly study groups of shares you have initially chosen and cherry pick the selective ones, at the right time.
Vibrancy exists at the smaller end of the market, provided one is able to spot it and make the best use.
A good investor knows the art of buying low and selling high.
You can not change the market conditions of your own.
They say, 'if there is no perfect discipline, carry on with the available discipline!' Similarly, if the investment climate is not ideal according to you, make the best use of the prevailing conditions and reap the maximum advantage of the market downturn.
This is the time, when the stocks are available at their all-time low.
Like a good researcher, you need to make sincere efforts to find out the shares that are likely to appreciate fast.
After such estimation, the next step is to gather historical and financial details about those companies.
The important issues that must engage the attention are: Collect historical and financial data about the companies relating to current and future price per share earnings, earning per share for the current year as well as for the previous years (approximately 3-5 years), financial reports, the growth prospectus explained by the management of the company in for ensuing years, the immediate and distant expansion plans, etc.
Perfect time of picking up the shares is important.
A wise investor will not take a grim view of the falling markets.
Rather, one will utilize the crisis to one's advantage, by converting the same for new trades.
You will be able to buy the shares of your choice in great quantities and competitive prices.
In such conditions, the new issues coming into the market will be cheaper.
While continuing with the efforts to find undervalued shares that have prospectus of quick growth, the aspect of diversified strategy needs to be taken into account.
To invest in the shares of the same sector, howsoever bright may the prospectus seem, is not correct; at the same time, this is not a hard and fast rule.
The important criterion is companies must stand the test of fundamental and/or technical analyses.
The ability of the company to generate cash flow and its inherent capacity to grow substantially over the coming years are important.
Look out for companies that have imaginative investment approach.
Those that invest in countries having great potential growth for future, fall in this category.
Also it is prudent to trust smaller companies with dynamic potential for expansion.
But their in-depth analysis is the pre-requisite.
In reality, no cut and dry formula exists and finding out the undervalued shares is not part of the rocket science.
Lean heavily on your ability to do imaginative research and analysis.
You need to look at the historical data of the share, assuming that history will repeat! Can you leverage the power of the share market to your best advantage, while hunting for the undervalued shares? This is the test to the skill of the investor.
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