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  #31  
Old 06-15-2005, 10:23 PM
RocketManJames RocketManJames is offline
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Default Re: Biggest things you look for in a stock?

[ QUOTE ]
I don't really run that many stock screens anyway. In my mind it can be decieving. I found a stock that had over 10 billion dollars in sales yet was trading at $8. There was a big reason why it was trading there

[/ QUOTE ]

This is a particulary dangerous thought, and you need to move away from it. You say that a company has $10B in sales, but it trades at $8. This does not really tell you enough. The stock price in and of itself does not tell you anything about the valuation of a company. You really need to focus on market capitalization if you're going to throw numbers around like this. And, what you are implying can be stated using a price to sales ratio. Basically, the P/S ratio is way too low, which triggered a few red flags in your mind. Remember that without data normalization, many numbers are useless.

-RMJ
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  #32  
Old 06-15-2005, 11:22 PM
michiganfan9 michiganfan9 is offline
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Default Re: Biggest things you look for in a stock?

That screen was just very basic. I would never invest in anything without spending hours or research to understand the company fully.
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  #33  
Old 06-16-2005, 11:56 AM
RocketManJames RocketManJames is offline
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Default Re: Biggest things you look for in a stock?

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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
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  #34  
Old 06-16-2005, 03:47 PM
michiganfan9 michiganfan9 is offline
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Default Re: Biggest things you look for in a stock?

I understand now, thanks for the post
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  #35  
Old 06-26-2005, 01:01 PM
michiganfan9 michiganfan9 is offline
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Default Re: Biggest things you look for in a stock?

I agree with dividend growth, as long as the company isn't like phizer who pays 60% roe on dividends,they can spend the money more productively
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