The decision making power regarding buying, keep
or sell the shares lies with the stockholder. So a question arises in mind what
is the best time to purchase or sell the company shares? It takes your time when
you read massive research reports, analysis of the analysts and point of view
of management. So what you can do? Simply you can observe the earnings report
from the last two years of the company. Here I will discuss some tips which can
help you in your decision-making process.
Growing Sales
First check the sales of the company growing or not, what is the rate
of growth in sales? Check the real figures in the sales growth, just check the
company latest press lease on the sales, also you can listen management point
of view on the company sales. You can also check company quarter reports.
The growth in sales is trending in the small
companies so check their reports; choose the companies with 10 percent annual
growth in sales. Also look at the company last earning quarterly report.
GP Margins
You need to know about company CGS (cost of
goods lost) on the trading profit and loss account (income statement). Also,
you need to study the administrative and selling expenses. If the company
expenses are less and revenues then it means the company sales are growing or
company is also controlling its expenses. If expenses are more and revenues are
less, then it means that the company expending more in advertisement
and want to launch the new product.
Directions & Assistance
Many companies are offering online guidance and
assistance like Wall Street. These companies provide you with insights
about the company earnings and other ups and downs.
If the company analysts forecast that the
company will generate more earnings then it needs to buy and if the forecast is
to generate less earning then no need to buy the stock.
Company Announcement About The Shares Buyback
The company can announce buyback programs if it
feels the stock has low value. After the buyback, some companies increased its
ability for earning to show it in the next quarterly report. The financial
ratio also takes positive impact due to buyback option. Some companies buyback
because the share has worth than the price in the market.
The buyback options are good signs for the investor,
sometimes company buyback from a little number of shareholders and the
remaining shareholder enjoy high earning per share. As the number of
outstanding shares falls down so the EPS per share increases.
Also Read: 6 Smart Ways to Get Small Business Financing
Innovative Products & Services
The new product requires the high cost for
research & development. Anyhow, you can expect any things from the arrival
of a new product on the market; it can or can’t generate high sales revenues.
If the new product sales become high in the stock market then it has a positive
impact on the earning per share.
For example, the Tesla is going to launch its
new model 3 car and analyses are expecting to increase to increase its earning.
After this news, the share price in the stock market slightly improved.
The Apple
has been launched a new product iPad in the year 2001, so investors and
analysts were not confirmed about the sales revenues will high or low. But the
sales boost after the launch of the product in the market and this leads to an
increase in Apple stock earning per share.
Financial News
Read carefully about the company financial news
for which you want to purchase the shares. The financial news has a great
impact on the company market stock price. For example, a company wants to
acquire another company or want to restructure its business. You can find a lot
of financial news online on different sites. The company yearly earnings
reports are also financial news that impacts the share price.
1 Comments
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