Re: Biggest things you look for in a stock?
[ QUOTE ]
That screen was just very basic. I would never invest in anything without spending hours or research to understand the company fully.
[/ QUOTE ]
I think you missed my point. If you didn't you can ignore this. I am not challenging the use of a screening tool, or the particular screen that you ran.
My point was that data that is not normalized is usually useless. If I told you, stock A trades for $30. And, stock B trades for $12. What do you know about them? My view is that you know very close to nothing. Why? Those numbers don't mean anything unless they are viewed with respect to the total number of shares outstanding.
This is similar to taking a sales figure without normalizing it to a "per share" basis. Take a company that has $1B in sales. Think of how differently you'd look at this figure if you were to find out that the company had 800MM shares outstanding versus 80MM shares outstanding. The same goes for earnings or any other such value. Without normalizing the data in some fashion, comparisons become difficult, if not impossible.
-RMJ
|