How to find good companies in the Indian stock market?
How to find good companies as there are thousands of publicly listed companies in the Indian stock market?
While growth investing is all about investing in companies that have strong earnings growth, value investing means investing in stocks which are undervalued in the market.
Growth stocks are very popular with investors because during a bull market phase, when company earnings are on the rise and interest rates are on a decline, growth oriented stocks perform very well.
Checkout the below stock advice which can help you find growth oriented stocks thousands of publicly listed companies in the Indian stock market:
Look for stock with high returns on equity:
Returns on equity is a powerful measure to evaluate corporate strength and efficiency of a company. It is a measure of overall profitability of the company, and reveals how well the company's leadership is utilizing the money of its shareholders.
It also shows how fast one can expect a company to grow. Before investing experts recommend comparing the company's current returns on equity to the five-year average returns on equity of both the company and the industry.
Look for high performance stocks:
High performance stocks have the potential to double their prices in just five to seven years. These include companies in their initial stage which are expanding at a fast pace exceeding over 10% annual growth rate. Investing in such high performance companies is one of the best stock advice given by successful investors.
Take a look at the profit margins of the company:
Before investing in a particular company it is important to check the profit margins of the company. This is a very crucial stock advice which an investor should never ignore.
Profit margin refers to the percentage of revenue the company generates as profit after removing expenses, interest and taxes.
A company with growing profit margins denotes a growth oriented stock as the company can command premium prices for its products and customers are fine with it.
Goodyear India, Relaxo Footwear, and Cera Sanitary ware are examples of high growth stocks in India which have given huge returns to investors in the past.
To summarize, investing in growth-oriented stocks is one of the best stock advice to create wealth from stock market.
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