Prajna Capital - An Investment Guide

THE bear phase may be far from over, but the quest for the next group of multi-bagger stocks have begun. Brokers say while savvy investors are still wary of buying aggressively, they have certainly started identifying stocks with long-term potential. One of the yardsticks they are looking at is the cash on the company’s balance sheet. Analysts say this strategy works in a bear market or an uncertain business environment, as net cash (adjusted to debt) is the only stable aspect on the balance sheet while valuations of assets and businesses vary as per market conditions. For instance, if a company stock is trading at Rs 500 and the entity has net cash at Rs 300 per share, then, as per this strategy, the share is valued at least Rs 300. Analysts note that significant cash balance in the books allows companies to pursue various activities such as a share buyback and acquisitions in uncertain market conditions like these. Many share buybacks allow investors to get a fair picture of ...

Look for Stocks with Earnings Growth Companies that show a consistent growth in earnings make attractive investment candidates for stock investors. Use R&D Spending in Evaluating Stock Research and development is important to every company, since that's where new products and services are created. Price Earnings Ratio - How P/E is Calculated The Price to Earnings Ratio is one of the most important numbers analysts look at to understand how the market values a stock. Beating the Stock Market - Why you may want to Judge your Stock Investments Differently Beating the market with your stock investments may not be the best goal for your portfolio. PEG - How PEG is Calculated PEG ratio provides investors a way to calculate how much future earnings growth is going to cost based on the stock's P/E and projected earnings growth rate. Price to Sales Ratio - How to Calculate the P/S The Price to Sales ratio is a tool for evaluating companies with no earnings that looks at how the ma...