Criterias to identify undervalued stocks
• Sudden fall in share price
Share price can fall below its intrinsic value.
• Growing earnings
Long term share price follow earnings trend.
• Potential for future growth
Catalyst for future growth ensure earnings growth will continue.
• Historical low price to earnings ratio
Low PE signals low valuation. Low valuation usually results in lower market expectation, hence company is easier to outperform expectation.
• Price to book below 1.00
Buying stock below PB of 1.00 may provide margin of safety.
• High dividend yield
If the stock pays higher dividend yield compared to its peers, it may indicate undervalued.
• Competitive advantage
Competitive advantage means a condition or circumstance that puts a company in a favourable or superior business position.
Below are few stocks that into those criterias:
• Walt Disney
Growing earnings, historical low price to earnings ratio, competitive advantage, potential for future growth
• Starbucks
Growing earnings, historical low price to earnings ratio, potential for future growth
• Celgene
Growing earnings, historical low price to earnings ratio, competitive advantage, potential for future growth, Sudden fall in share price
• Starhill Global REIT
Price to book below 1.00, high dividend yield, competitive advantage, potential for future growth
Share price can fall below its intrinsic value.
• Growing earnings
Long term share price follow earnings trend.
• Potential for future growth
Catalyst for future growth ensure earnings growth will continue.
• Historical low price to earnings ratio
Low PE signals low valuation. Low valuation usually results in lower market expectation, hence company is easier to outperform expectation.
• Price to book below 1.00
Buying stock below PB of 1.00 may provide margin of safety.
• High dividend yield
If the stock pays higher dividend yield compared to its peers, it may indicate undervalued.
• Competitive advantage
Competitive advantage means a condition or circumstance that puts a company in a favourable or superior business position.
Below are few stocks that into those criterias:
• Walt Disney
Growing earnings, historical low price to earnings ratio, competitive advantage, potential for future growth
• Starbucks
Growing earnings, historical low price to earnings ratio, potential for future growth
• Celgene
Growing earnings, historical low price to earnings ratio, competitive advantage, potential for future growth, Sudden fall in share price
• Starhill Global REIT
Price to book below 1.00, high dividend yield, competitive advantage, potential for future growth
Comments
Post a Comment