What's the Most useful Stock to Invest In?

If you're similar to stock market investors you have struggled with finding the most effective stocks to invest in.

There are many approaches to find the best stocks to invest in. But first you'll need to determine what method is most effective for you.

Basically there are two main types of stock market investing

1. Purchasing growth stocks

2. Purchasing value stocks

Growth stocks are companies which are growing fast in earnings. There are certainly a large amount of hi-tech and medical growth stocks.

Value stocks are stocks which are undervalued simply because they trade at a cheap compared to the company's fundamentals (i.e. earnings, dividends, sales etc...)

Growth stocks generally will fatten your banking account faster but there's more risk whereas value stocks will generally grow at a slower more sustainable pace but probably won't offer you ulcers.

Here's what some investors try to find in a growth stock (based on my knowledge of the National Association of Investors Corporation (NAIC) criteria):

1. Strong Earnings Growth - either quarter to quarter or year over year

2. Strong Forward Earnings Growth - analysts estimate what earnings will soon be for another quarter or year, if they estimate growth that's a plus.

3. Profit margins - you'd prefer the organization to be making a large amount of profit to sustain further growth

4. Return On Equity (ROE) - try to find growth in ROE or a reliable ROE

5. Doubling in 5 years or less - you'd like the stock to double in 5 years - look at what the analysts estimate for price potential.

Also here's what some value investors try to find:

1. Shares price below intrinsic value

2. Low Price to Earnings (P/E) ratios

3. Price to Earnings Growth (PEG) ratio below 1 is good

4. Stock price is significantly less than tangible book value

5. A debt to equity ratio below 1

6. The company's assets should become more compared to the company's liabilities by at the least an issue of 2

7. Dividend Yield within 1/3 of the amount of the AAA bond yield

8. Earnings growth of at the least 7% per year for the past 10 years

You will find a variety of alternative methods to find the best stock to buy but this will give you a starting point https://www.scamrisk.com/best-way-to-invest-5k/.