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Old 06-15-2005, 10:23 PM
RocketManJames RocketManJames is offline
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Join Date: Nov 2002
Posts: 118
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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