Have you ever imagined how the stock market investors acquire a huge wealth? Do you know their secrets? It is nothing but their strategies in choosing the best company to invest in the Indian stock market. In 2018, NSE had a total market capitalization of more than US $2.27trillion, making it the world’s 11th-largest stock exchange.
As of April 2018, over 60 million retail investors had invested their savings in Indian stocks. When it comes to returns, the Indian stock market is a little more reserved as the average stock market return is 10% per year. Nearly 70% of the country’s GDP is derived from large companies in the corporate sector, these companies are available to trade in the stock market. Seek out help from 500 per crore as their experienced professionals would help you in choosing the right company, by evaluating the company’s performance based on strategies and future trends. Here are some of the strategies that would help you choose the best company for you before investing your valuable savings.
- P/E RATIO:
If you are new to the stock market, be aware of the P/E ratio. P/E is abbreviated as price to earnings, it displays if the market is undervaluing or overvaluing your chosen company. In general, investors determine the market value of a stock by comparing it with the company’s earnings.
Henceforth, you are recommended to have a close look on the P/E ratio of the company as it will help you to yield better returns.
- PRICE TO BOOK VALUE:
Price to Book value (PBV) is useful to value companies whose assets are mostly liquid. It is valued by comparing the company’s market price with the book value. If you are a beginner you might not be sure about the term book value. Book value is nothing but the amount that remains after the company liquidates its assets and repays its liabilities. PBV provides a company’s inherent value.
- DEBT TO EQUITY RATIO:
You will be able to evaluate a company’s financial leverage by knowing the debt to equity ratio. You can calculate it by dividing the company’s total liabilities by shareholder equity. A low figure in the debt to equity ratio would be considered to be better because a higher leverage ratio would indicate the stocks are at higher risk for shareholders.
- OPERATING PROFIT MARGIN:
Operation profit margin will let you know the profit earned by the company from sales after paying off the cost of production. The cost of production would include the salaries of employees, cost of the raw materials, etc. Interests and tax are excluded from the calculation and hence it will be calculated by dividing a company’s operating income with net sales.
- RETURN ON EQUITY:
The return on equity ratio would help to find out the return rate of the company’s stock received by the shareholders. This will help you to know whether the company is generating good returns on the investment made by their shareholders. You can calculate it by dividing the net income to its shareholder’s equity.
Before investing your money, analyze all the possible strategies and seek expert advice from 500 per crore. At 500 per crore, you will discover how to design strategies with expert support by studying in detail about the trends, market capitalization, company revenue growth, and much more. Stay connected and visit 500 per crore’s Facebook Page to get live updates on your invested stocks