Criteria of Stock Screening
To achieve a higher investment return, a stock must be represented by quality companies with effective management team. It doesn’t necessarily imply that a good stock pick will conclude an effective management as it is everything in attainable stock investment.
Good thing financial ratios exists that will pick good stock. To filter the rubbish stocks in the market, the above average EPSGR and excellent ROE is the first screening criteria. The freedom is yours to choose any figure which you feel comfy. Although past performance is not the basis of bright future, it’s still the best information for good stock pick. Profit will run continuously sustainable even if there are no changes in its business foundation and its management. On top of that, it is essential to consider debt to equity to get the manageable debt when economic crisis came. Also, consider profit margin that shows good performance in reducing operating cost.
In choosing stocks you’ll be investing, you need to be careful and persistent in selecting. If you perform the habit of speculative stocks, this method will definitely not work for you. But if you’re indeed serious in vesting for long term, a good stock pick can easily eliminate any unwanted elements and stocks that are not worthy since it started.
