Saturday, December 24, 2011

Doing research on a stock. What are the 5 major parameters in deciding whether to buy or sell?

or pass on a stock? Can you use Charter Communications and Apple as examples? I continually see P/E ratio. What would be a good P/E for Charter and a good P/E for Apple and where would I find that information?|||Apple





1.) Earnings Per Share - According to Investors Business Daily, Apple has a 98 ranking on earnings per share; this means Apple has had earnings growth better than 98% of all companies that are publicly traded, it is in the highest 2% as far as growth.





2.) Accumulation - According to Investors Business Daily, on a scale from A-E Apple has an "E" rating on accumulation, meaning the shares have been sold off recently more than most companies, more investors have been selling share of Apple in the short term, ideally you want stocks that are being acculmulated:





http://finance.yahoo.com/q/bc?s=AAPL%26amp;t=3鈥?/a>





3.) Institutional Sponorship - Ideally you want a stock that is being accumulated by large institutions such as banks, insurance companies, pension funds, etc. These investors have the big money needed to move stocks higher upon accumulation of large blocks. Apple's institutional sponorship is 68%; ideally you want this to be between 70-90% showing that leading mutual funds have been buying the stock.





4.) Market Conditions - Market has been in a correction over the last few weeks, but seems to be poised to rally back, ideally you do not to want to purchase stocks when the market is on a downward spiral, as the keep going down. A rising tide lifts all boats.





5.) New products, services or management: these can spark new sales and revenues or ideas and should factor into weather one buys a stock ahead of future earnings and prospects.

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