Lightyear FX: Financial Analyst, Financial Media Person, Amateur Research Trading Technical Analysis. Stay on top of the latest cutting-edge technology information and share the most in-depth industry insights with you. The following content is from Just2Trade.
One. Five characteristics of big bull stocks in the past 20 years
1. The time to market is long enough
When choosing a long-term investment target, if a company's net profit can maintain a steady rise for 3-5 consecutive years and have good expectations, then the company has a strong investment value.
2. High growth + equity expansion
In addition to the long time on the market, bull stocks also have the characteristics of high growth in performance and high dividend transfer.
3. Unique competitiveness and resource advantages
Even in a big bear market, big bull stocks outperform the general trend, and the main income is an important criterion.
4. The main business is in line with the hot spots of economic development
From the perspective of industry distribution, the machinery and equipment and biomedical industries have emerged the most bull stocks in the past two decades.
5. The eternal subject of consumption upgrading
In the development process of such a multi-level and all-round capital market, along with the adjustment and upgrading of industrial structure and the tide of low-carbon economy and environmentally friendly, green cycle and sustainable economic development, the birth of every big bull stock will be accompanied by the expectations of investors and vigorously sought after by the market, and there will be more and more big bull stocks in China's emerging economies.
Two. An essential tool for investment analysis
1. Porter's Five Forces Analysis
Don't look at a stock in isolation, but put a company in the upstream and downstream industry chain of the industry and the background of the industry competition pattern to analyze, focusing on three issues: the company's bargaining power over the upstream and downstream, the comparative advantage with competitors, and the industry's threshold for potential entrants.
2. DuPont analysis
Find out what model the company has relied on to make money in the past five years, and then see whether the company's strategic planning, team background and management execution are consistent with its business model.
3. Valuation analysis
Buy when it is significantly undervalued through the cross-industry ratio and historical vertical ratio, plus the ratio of market capitalization to future growth space.
Three. Three elements of stock selection
1. Valuation
A good company is not a good stock if it is expensive. It is generally desirable that the valuation is lower than that of peers, lower than the historical average, or that the total market capitalization is lower than the future growth space.
2. Quality
No matter how cheap a bad company is, it's not a good stock. To judge whether a company is a good company, the focus is on whether the company has advantages such as brand, channel, cost, team, mechanism, pricing power and growth.
3. Timing
Even good and cheap companies may not rise for a long time without a catalyst. Common catalysts include fundamental inflection points, earnings exceeding expectations, executive overweights, new orders, etc.