Jenni's strategy on picking great stocks:
beta greater than 1 is risky (good for under 45 years old)
Look for growth stocks (if you're under 45)
eps=1.50 or higher
Small cap - 5% of portfolio or so. Look for $7/share or greater, 25% growth in sales and earnings, net profit margin >7%
Net income/shares=earnings per share (EPS)
Share price/Eps= Price equity ratio
low Pe= good by (or could mean bad news is looming ahead)
Stock screen: p/e less than 30
PE/EPS expected growth % 1 yr= PEG <1=good buy 1=1 fair >1=overpriced
-use to evaluate growth stocks
PE/EPS expected growth 5 year=YPEG <1=good buy 1=1 fair >1=overpriced
-use to evaluate regular stocks
REVENUE value:
Price Sales Ratio = PSR
(Shares outstanding * share price + debt)/revenues over past 4 quarters= PSR
-the lower the psr the better
Shareholder equity/# shares outstanding = book value
-the closer you can buy to or lower than book value, the better
Shareholders equity/net profit= ROE (return on equity)
-the higher the ROE the better
Debt/equity= Debt to equity ratio
-the lower the better
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