The Investor Sentiment - Equity and investments forum for Sri Lankans
Search
 
 

Display results as :
 


Rechercher Advanced Search

Latest topics
» First capital holdings
How to Find Undervalued Stocks and Turn a Large Profit EmptyToday at 12:33 am by pathfinder

» Thread for News on CSE and SL Economy
How to Find Undervalued Stocks and Turn a Large Profit EmptyYesterday at 7:02 pm by NIRMALSG

» Happy Father's Day !
How to Find Undervalued Stocks and Turn a Large Profit EmptyMon Jun 17, 2019 8:58 pm by spw19721

» Dividend Announcement
How to Find Undervalued Stocks and Turn a Large Profit EmptyMon Jun 17, 2019 6:57 pm by chutiputha

» Cricket !
How to Find Undervalued Stocks and Turn a Large Profit EmptyMon Jun 17, 2019 8:20 am by කිත්සිරි ද සිල්වා

» DPL.N0000 (Dankotuwa Porcelain PLC)
How to Find Undervalued Stocks and Turn a Large Profit EmptySun Jun 16, 2019 7:12 am by NIRMALSG

» Re: Financial reports Q1-2019
How to Find Undervalued Stocks and Turn a Large Profit EmptyFri Jun 14, 2019 8:57 pm by dhanurrox

» SAMP.N0000 (SAMPATH BANK PLC)
How to Find Undervalued Stocks and Turn a Large Profit EmptyFri Jun 14, 2019 8:11 am by puliyanam

» SEYB.N0000 ( SEYLAN BANK PLC )
How to Find Undervalued Stocks and Turn a Large Profit EmptyThu Jun 13, 2019 8:11 pm by ruwan326

» NTB.N0000 (NATIONS TRUST BANK PLC)
How to Find Undervalued Stocks and Turn a Large Profit EmptyThu Jun 13, 2019 8:08 pm by ruwan326

» PABC.N0000 (Pan Asia Banking Corporation PLC)
How to Find Undervalued Stocks and Turn a Large Profit EmptyThu Jun 13, 2019 8:06 pm by ruwan326

» NDB.N0000 (NATIONAL DEVELOPMENT BANK PLC)
How to Find Undervalued Stocks and Turn a Large Profit EmptyThu Jun 13, 2019 7:58 pm by ruwan326

» HNB.N0000 ( Hatton National Bank PLC)
How to Find Undervalued Stocks and Turn a Large Profit EmptyThu Jun 13, 2019 7:57 pm by ruwan326

» HDFC.N0000 (HOUSING DEVELOPMENT FINANCE CORPORATION BANK OF SRI LANKA)
How to Find Undervalued Stocks and Turn a Large Profit EmptyThu Jun 13, 2019 7:48 pm by ruwan326

» DFCC.N0000 ( DFCC BANK PLC )
How to Find Undervalued Stocks and Turn a Large Profit EmptyThu Jun 13, 2019 7:45 pm by ruwan326

» COMB.N0000 ( COMMERCIAL BANK OF CEYLON PLC )
How to Find Undervalued Stocks and Turn a Large Profit EmptyThu Jun 13, 2019 7:43 pm by ruwan326

» මිල සූත්‍රය වැරදුණාද, වැරැද්දුවාද?
How to Find Undervalued Stocks and Turn a Large Profit EmptyThu Jun 13, 2019 9:21 am by ruwan326

» අනං මනං! #/+?.<>
How to Find Undervalued Stocks and Turn a Large Profit EmptyThu Jun 13, 2019 8:07 am by ruwan326

» Should CSE be like this? Whose FAULT is it?
How to Find Undervalued Stocks and Turn a Large Profit EmptyWed Jun 12, 2019 5:21 pm by Yin-Yang

» CCS.N0000 ( Ceylon Cold Stores)
How to Find Undervalued Stocks and Turn a Large Profit EmptyTue Jun 11, 2019 9:15 pm by ruwan326

» Access Engineering AEL Technical Analysis
How to Find Undervalued Stocks and Turn a Large Profit EmptyTue Jun 11, 2019 9:10 am by Jimmy

» DOCK.N0000 (COLOMBO DOCKYARD PLC)
How to Find Undervalued Stocks and Turn a Large Profit EmptyMon Jun 10, 2019 11:13 pm by hammurabi

» MCPL.N0000
How to Find Undervalued Stocks and Turn a Large Profit EmptySun Jun 09, 2019 12:15 pm by ruwan326

» Tourism sector
How to Find Undervalued Stocks and Turn a Large Profit EmptySun Jun 09, 2019 6:53 am by NIRMALSG

» LOFC Initiating Coverage - STRONG BUY - 29 03 17 - FC Research
How to Find Undervalued Stocks and Turn a Large Profit EmptyFri Jun 07, 2019 5:42 am by stockback

» Easter Sunday Attack and Sri Lanka
How to Find Undervalued Stocks and Turn a Large Profit EmptyThu Jun 06, 2019 9:13 am by ruwan326

» In the Meantime, Within Our Shores !
How to Find Undervalued Stocks and Turn a Large Profit EmptyMon Jun 03, 2019 2:14 pm by කිත්සිරි ද සිල්වා

» What to Analyse
How to Find Undervalued Stocks and Turn a Large Profit EmptySun Jun 02, 2019 7:11 am by Leon

» Tolerance at its Best !
How to Find Undervalued Stocks and Turn a Large Profit EmptyThu May 30, 2019 10:50 am by Yin-Yang

» විශ‍්‍රාම ගැන්වීමේ වයස් සීමාව ඉහළ දැමීමට මහ බැංකුවෙන් යෝජනාවක්
How to Find Undervalued Stocks and Turn a Large Profit EmptyTue May 28, 2019 8:03 am by කිත්සිරි ද සිල්වා

» සදහම් අටුවාව
How to Find Undervalued Stocks and Turn a Large Profit EmptyTue May 28, 2019 7:07 am by ruwan326

» TPL.N0000 (TALAWAKALE PLANTATIONS )
How to Find Undervalued Stocks and Turn a Large Profit EmptyMon May 27, 2019 8:04 am by yellow knife

» බැරි වෙලා වත් අනික් පැත්ත උනොත්...?
How to Find Undervalued Stocks and Turn a Large Profit EmptyFri May 24, 2019 3:42 pm by smallville

» Sri Lanka at Cross Roads: Time to Learn, Unlearn and Relearn - Prof Rohan Gunaratna
How to Find Undervalued Stocks and Turn a Large Profit EmptyFri May 24, 2019 3:10 pm by puliyanam

» Songs to listen
How to Find Undervalued Stocks and Turn a Large Profit EmptyFri May 24, 2019 11:26 am by yellow knife

» Dhammika Perera non-committal on common candidate speculation
How to Find Undervalued Stocks and Turn a Large Profit EmptyThu May 23, 2019 2:54 pm by කිත්සිරි ද සිල්වා

» Films - To Watch List
How to Find Undervalued Stocks and Turn a Large Profit EmptyWed May 22, 2019 10:04 am by කිත්සිරි ද සිල්වා

» Japan, India in Deal at ‘Belt And Road’ Colombo Port: Nikkei
How to Find Undervalued Stocks and Turn a Large Profit EmptyTue May 21, 2019 2:06 pm by Ethical Trader

» Presidential poll between 15 Nov-7 Dec
How to Find Undervalued Stocks and Turn a Large Profit EmptyTue May 21, 2019 11:31 am by bjmd

» Flying is the Safest mode of Transport
How to Find Undervalued Stocks and Turn a Large Profit EmptyTue May 21, 2019 7:07 am by කිත්සිරි ද සිල්වා

» My Port Folio Bleeding But Its just the Begining Of..
How to Find Undervalued Stocks and Turn a Large Profit EmptySat May 18, 2019 7:40 pm by serene

» Sri Lanka mulls 25-pct ownership limit in finance companies
How to Find Undervalued Stocks and Turn a Large Profit EmptyFri May 17, 2019 3:40 pm by Backstage

» Searing Heat in China Is Causing Havoc for Rubber Makers
How to Find Undervalued Stocks and Turn a Large Profit EmptyFri May 17, 2019 2:43 pm by Backstage

» Israeli spyware breached WhatsApp security
How to Find Undervalued Stocks and Turn a Large Profit EmptyWed May 15, 2019 7:47 am by කිත්සිරි ද සිල්වා

» Is Burka prohibted ?
How to Find Undervalued Stocks and Turn a Large Profit EmptyWed May 15, 2019 7:30 am by කිත්සිරි ද සිල්වා

» Thread for General News Local/Foreign
How to Find Undervalued Stocks and Turn a Large Profit EmptyTue May 14, 2019 11:49 am by CK

» Fed Rate hike , Rs Devaluation PART 2 : Should CSE be like this? Whose FAULT is it?
How to Find Undervalued Stocks and Turn a Large Profit EmptyFri May 10, 2019 7:15 pm by Backstage

» NEST.N0000
How to Find Undervalued Stocks and Turn a Large Profit EmptyThu May 09, 2019 7:54 pm by ruwan326

» Sweden-based Tundra Fund says Colombo bourse at lowest levels since 2009
How to Find Undervalued Stocks and Turn a Large Profit EmptyWed May 08, 2019 5:43 pm by serene

» Telenor and Dialog Axiata's parent in talks to merge Asian businesses
How to Find Undervalued Stocks and Turn a Large Profit EmptyMon May 06, 2019 1:50 pm by Backstage

June 2019
SunMonTueWedThuFriSat
      1
2345678
9101112131415
16171819202122
23242526272829
30      

Calendar Calendar

Disclaimer


Information posted in this forum are entirely of the respective members' personal views. The views posted on this open online forum of contributors do not constitute a recommendation buy or sell. The site nor the connected parties will be responsible for the posts posted on the forum and will take best possible action to remove any unlawful or inappropriate posts.
All rights to articles of value authored by members posted on the forum belong to the respective authors. Re-using without the consent of the authors is prohibited. Due credit with links to original source should be given when quoting content from the forum.
This is an educational portal and not one that gives recommendations. Please obtain investment advises from a Registered Investment Advisor through a stock broker

How to Find Undervalued Stocks and Turn a Large Profit

Go down

How to Find Undervalued Stocks and Turn a Large Profit Empty How to Find Undervalued Stocks and Turn a Large Profit

Post by nihal123 on Wed Nov 01, 2017 10:37 pm

There are many competing investment theories about how to find the “best” investments based on your time frame, risk tolerance and specific objectives. One approach, dating back at least to Benjamin Graham’s 1949 book, The Intelligent Investor, is to identify “undervalued stocks” that for one reason or another are selling at prices far below their underlying values.

Undervalued Stock Indicators
But how can you identify undervalued stocks? There are six criteria investors look for:

Low price/earnings ratio.
No discussion of stock prices would be complete without referencing one of the most common, but not always the best, measures of a stock’s relative value: the price/earnings (P/E) ratio. Every company has a P/E. The higher the P/E, the higher the price of the stock relative to the earnings (profit). While a relatively low P/E ratio may indicate a buying opportunity, it’s important to remember there is likely a reason for the low P/E. For example, a company might report high earnings, but professional investors, who follow the business closely, know the company isn’t telling the whole truth. As a result, the stock price will remain low and the P/E ratio will look appealing. These scenarios are rare, however, so you should be OK to rely on the P/E ratio to find deals.

Lagging relative price performance.
If a company’s share price is lower than those of its industry peers, this may reveal an underperformance situation. This could happen for several reasons. One example is if stock analysts show concern over certain financial metrics (like the ones listed below). It’s not unusual for a single voice on CNBC or in The Wall Street Journal to cause a whiplash effect as investors sell off and drive the price down. What happens is investors drive the price too far down, to the point of making the stock price undervalued. In the screener you use, there will be an option to compare individual stock price histories over various periods of time against other individual stocks and against stock indexes.

Low price/earnings growth ratio.
The price/earnings growth (PEG) ratio is considered more accurate than just a company’s P/E alone. When you’re looking at a stock, take the P/E ratio and divide by the “earnings growth rate.” If the ratio is less than 1 (e.g., a P/E of 10 and projected growth of 15%, giving us a PEG ratio of 0.66), investors may be giving more weight to past performance than to future growth opportunities. Be aware that growth projections are just that, however: projections.

High dividend yield.
Bet you didn’t think to look at the dividend yield, did you? But actually, if a company’s dividend payment rate exceeds that of their competitors, this may indicate that the share price has dipped to “undervalued” status (in relation to its dividend payment). If the company is not financially troubled and future dividend payments appear secure, the dividend opportunity can provide returns in the short term, as well as potential for the stock price to move higher in the future. If you’re using a stock screener (see below), use the “dividend yield %” to find undervalued stocks in a given industry.

Low market-to-book ratio.
A company that has a low market value (total market capitalization) as a ratio to book value (total shareholder equity) may present an undervaluation situation. The key is understanding the real value of both tangible assets (land, buildings, cash) and intangible assets (goodwill, intellectual property). For example, a company that produces and sells toys might also own property. The value of the property the company owns could potentially be worth more than the toy business it operates. Investors might overlook this and the price of a stock will not reflect the underlying value of assets the toy company has on the books.

Free cash flow.
Many investors put less emphasis on reported profit and more on free cash flow — the amount of cash generated by the business after all expenses are accounted for. A stock that appears low-priced because of lower reported earnings may be a great deal in terms of cash flow. You can find this from inside a screener or through your brokerage firm by looking for the cash/share ratio. It can be fascinating to see how two apple-to-apple companies differ in terms of cash on the books.

These metrics aren’t the be-all-end-all to determine if a stock is a good value. No single metric or measure can ensure an investor that a potential investment is undervalued. If several of these seem to be confirming an undervaluation situation, however, you may have identified a market inefficiency that is a good investment opportunity.

Tools for Finding Undervalued Stocks

These days, there are free online tools that provide investors with the ability to search and screen investment ideas within seconds. You can start with a stock screener, such as Google Stock Screener or Yahoo Stock Screener. If you want more in-depth search capabilities and don’t mind paying a few bucks, you can use YCharts’ Stock Screener. With a subscription to YCharts, you’ll also get access to many other investing tools.

https://finance.google.com/finance/stockscreener

https://finance.yahoo.com/screener/new



Or if you have a brokerage account, I’d recommend using its screeners. What these tools do is analyze the financial metrics of thousands of companies and deliver to you the ones that meet your input. For example, if you input “P/E must be lower than 15,” the screeners will not show you any companies with P/E ratios higher than 15.

https://investorjunkie.com/52351/find-undervalued-stocks/
nihal123
nihal123
Top contributor
Top contributor

Posts : 5551
Join date : 2014-02-24
Age : 53
Location : Waga

Back to top Go down

How to Find Undervalued Stocks and Turn a Large Profit Empty Re: How to Find Undervalued Stocks and Turn a Large Profit

Post by Ethical Trader on Thu Nov 02, 2017 12:08 pm

Thanks Nihal. Its very usefull.
Ethical Trader
Ethical Trader
Top contributor
Top contributor

Posts : 5255
Join date : 2014-02-28

Back to top Go down

How to Find Undervalued Stocks and Turn a Large Profit Empty Re: How to Find Undervalued Stocks and Turn a Large Profit

Post by Ethical Trader on Thu Nov 02, 2017 12:25 pm

This link is for CSE stocks. Yahoo or google does not cover CSE.

http://www.mediafire.com/view/prbkigussekmvpy/CSE_Screener_1_4_0.xlsm
Ethical Trader
Ethical Trader
Top contributor
Top contributor

Posts : 5255
Join date : 2014-02-28

Back to top Go down

How to Find Undervalued Stocks and Turn a Large Profit Empty Re: How to Find Undervalued Stocks and Turn a Large Profit

Post by xmart on Fri Nov 03, 2017 8:53 am

thanks ET.

but database outdated. it is not allowing us to update the database.
xmart
xmart
Top contributor
Top contributor

Posts : 699
Join date : 2015-01-17

Back to top Go down

How to Find Undervalued Stocks and Turn a Large Profit Empty Re: How to Find Undervalued Stocks and Turn a Large Profit

Post by malanp on Fri Nov 03, 2017 9:01 am

Low PE ratio (with the adjusted earning from core business) is the most reliable..

malanp

Posts : 453
Join date : 2014-03-04

Back to top Go down

How to Find Undervalued Stocks and Turn a Large Profit Empty Re: How to Find Undervalued Stocks and Turn a Large Profit

Post by Ethical Trader on Sat Nov 04, 2017 11:24 am

Yes, its somewhat out dated but I know Dileepa updates it from time to time.
xmart wrote:thanks ET.

but database outdated. it is not allowing us to update the database.
Ethical Trader
Ethical Trader
Top contributor
Top contributor

Posts : 5255
Join date : 2014-02-28

Back to top Go down

Back to top


 
Permissions in this forum:
You cannot reply to topics in this forum