Which Stock to Buy?

Before we need to know which stock to buy, we need to know the fundamental of an individual companies and how they perform in terms of revenue, profits, assets, and borrowing.

It is important to know about all these as the company's share price is ultimately the market's reflection of how valuable that company is. If a company is making profits and these profits are growing year on year, with borrowings contained to low levels and revenues also growing, then is an ideal company to invest in, provided we expect the company to continue growing at such levels. 

Well, by looking at the fundamental of an individual company, a lot people fails to adopt either investing in a fundamentally strong company but doing so in a bad overall market or investing in a great company in a bad market sector. 

By researching of all the information, you can use the method that I find which can give you a good stock selection on any stock and industry you like, but if you want a top-performing stock and the best chance of the stock going up you can screen for it.

Personally, I like to use MSN Money's screener. Only change the boxes that I refer and leave the rest the way they are.

1. First of all, we need to pick an industry that is currently hot. If you do not know any or do not want to do the research, just select "all industries".

To pick a 'hot' industry. Log in to www.prophet.net. At the top bar, click on 'EXPLORE' and select the sub category 'industry ranking'. Pick only the top 1-20 industries I recommend a 1 year time frame.,

2. The market capitalization can be 'small', 'medium', or 'large' which depends on what the market is favoring at the moment. I prefer to use 'small' to 'medium' but this also increases volatility.

3. 'Net Profit Margin' selected 'as high as possible'

4. '12 month relative strength' should be 'as high as possible'

5. 'Debt to Equity Ratio' should be 'as low as possible'

6. 'Revenue Growth Year vs. Year' should be 'as high as possible'

7. Optional: 'Average Daily Volume' over last 2 weeks should be 'as high as possible'

Any of the other features that I did not mention should NOT be used. You will now have a list of potential candidates to watch more closely and possibly trade. 

Pick a stock that have 25% or more in the growth column and over 80 in the relative strength column.

This is the best step-by-step way so far I discover of choosing which stock to buy by using the available FREE tool in the Internet easily.