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How I Value a Stock For Investing Using The Financial Ratios?

Discussion in 'Technical Analysis' started by shabbir, Nov 18, 2018.

  1. shabbir

    shabbir Administrator Staff Member

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    One has to identify at what valuation one is comfortable investing and then invest in the right stock at the right price and for the right time to make the most returns from the investment.

    Continue reading...
     
    shabbir, Nov 18, 2018
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  2. chaitanya_mella

    chaitanya_mella Contributor

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    Nice article. I have a doubt. Could you elaborate on the PEs of the two companies you mentioned. Page is slight higher than its 5 year median PE which is around 60. I understand that part. Jubilant Foodworks is below its five year median of 75. So how would the comparison work in this case.
     
    chaitanya_mella, Nov 19, 2018
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  3. shabbir

    shabbir Administrator Staff Member

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    Median is higher because stock used to trade higher in an anticipation that new CEO will turn things around. When the profits fell nit the stock price didn't to the extent of the profits in a hope that it will recover. So its median PE became high in the past years.

    Hope it clarifies things. Again this is my view and this is how I justify the numbers. I was holding the stock pre those developments but couldn't hold on to it because I wasn't very convinced about the turnaround.
     
    shabbir, Nov 20, 2018
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  4. chaitanya_mella

    chaitanya_mella Contributor

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    Right. In such cases how does one evaluate a comfortable price point?
     
    chaitanya_mella, Nov 20, 2018
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  5. shabbir

    shabbir Administrator Staff Member

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    The PE where you are fine investing considering the future growth aspects and then use technical analysis to see the bottom formation patterns.
     
    shabbir, Nov 22, 2018
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