How to Predict Stock Price Will Go Up Or Down

Stock Price Will Go Up Or Down:

Before investing in any company, we should do complete research about it, otherwise we may have to bear heavy losses. Today in this post we will tell you how to choose multibagger stock?

Before proceeding further, let me tell you that some things have been explained in detail in this post, so the post can be a bit long.

Before Selecting Stocks, You Should Take Care of These 10 Things.

1) Type of Business:

Which type of business does the company whose stocks you are going to select? Are they growing business because you can earn money only when the company can grow further. If a company is fundamentally good now, but going forward, its business may decrease or close, then you will be at a loss going forward.

For example, if you invest in a plastic manufacturing company, then your money is bound to sink because plastic is being banned all over the world and an alternative is being sought.

Inside this you have to use your common sense a little and | It has to be seen whether the business of the company can grow further.

2) Market Capitalization:

In this you have to see whether the company is small cap, mid cap or large cap. Because if you invest in a small cap company, then the chances of its growth are very high, but the chances of loss are also high.

Small Cap – High Risk – High Profit
Mid Cap – Medium Risk – Medium Profit
Large Cap – Low Risk – Low Profit

3) Profit Growth:

In this it is to be seen whether the Profit of that company is increasing every year. Is it not decreasing with time or is it maintenance? It is very important for you to see this thing because if the Profit of the company is increasing, it means that the company will also grow and its share price will also increase. If the profit decreases then you will also suffer loss. To know this thing, you can compare the profit of the last 3-4 years of the company and compare its Quater result.

4) Debt:

Now you have seen the profit. You also have to see how much is the debt of the company. It is not that the company is worth 10 thousand crores and the debt on it is 20 thousand crores. This page suggests such companies to you whose debt is less than its market cap.

After this you have to look at some Financial Ratios.

5) ROE:

Return on Equity If I tell you simply, if the ROE of a company is more than 15 then it is considered good.

6) ROCE:

Return on Capital Employed. If it is more than 20 then it is considered good.

7) Free Cash Flow:

That is, how much extra cash does the company have, which the company can use to grow itself and pay dividends. Can do other things too.

8) Promoter Holding:

Promoters are those who have made the company, according to me you should avoid those companies whose promoter holding is less than 45%.

9) PE Ratio:

The lower it is, the better it is considered. It is used to compare 2 companies of the same sector. And it should not be negative, nor should it be too low.

10) News:

News also plays a very important role in raising and lowering the share price, if the news is good then the share price goes up, if the news is bad then the share price comes down.


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