We as stock investors would like to invest in a financially stable company. What is the measure of an unstable company? A company that is on the verge of going bankrupt can be called unstable. Altman Z-Score is a financial model based on which bankruptcy can be predicted. The Altman Z-Score model can point toward…
Among other metrics, our stock screener stands out because of two important numbers, the overall score, and intrinsic value. The intrinsic value of stocks is estimated based on a few standard financial models like DCF and a few of my own algorithms and logic. But the overall score-rendering proved to be more complicated. Why? Because…
What does it mean by fundamentally strong stocks? These are stocks that have a strong underlying business. As an investor, what parameters we must investigate to determine whether a business is strong or weak? This is what we’ll discuss in this article. [For a broader perspective, check out our guide on Top Stocks to Buy…
Why do the big companies have debt? Are there disadvantages to being a debt-free company? Debt is Good or Bad for Companies? We often see companies carry debt on their balance sheet. For example, here is data for companies in the BSE-500 index. Out of all stocks in this index, only 19% are debt-free. About…
A more common term for shareholder equity is Net Worth. It is visible on the company’s Balance Sheet. This number highlights an approximate liquidation value, net of liabilities, of a company. It is the capital receivable at the hands of the shareholders after the company’s assets are sold and all debts are repaid. [For a…
What is Return on Equity (ROE)? It is a financial ratio that is calculated by dividing net profit (PAT) by the total shareholder’s funds (Net Worth – NW) of a company. ROE is the measure of the company’s efficiency that highlights how well the company is using shareholder capital to yield net profits. A list…
Performing stocks analysis by comparison method is relative valuation. We can compare a company’s valuation multiples with its industry average or with its peers. This valuation approach is easy but there are limitations…
The mathematics side of Net Present Value estimation is complicated. Hence, we’ve implemented the whole algorithm in our stock screener. Nevertheless, this article explains my NPV algorithm in full detail.
The debt-Equity ratio (DE) is easy to calculate. But its interpretation is not as straightforward as we think. We generally assume that a DE ratio of 2 is acceptable. But for analysts, this number is too high. Let’s look at the DE ratio from an analyst’s perspective.
If a layman would like to shortlist few stocks, what parameters must be considered? In this article I’ve explained how a 12-Parameter stock screener will help in the screening process.
Bonus issue and stock splits make news for good companies. Long-term shareholders like this corporate action as it can increase the demand for their holding stock.
With value investing comes a few synonymous terms like reading financial statements, intrinsic value, over and undervaluation, Benjamin Graham, Warren Buffett, long-term holding, etc.
