Reflection Investment
Reflection: Investment
Investment checklist
- - - - - - - - - - Part 1: Basic Research - - - - - - - - - -
What Where Why Action
One-year Price chart with [Link] Buying a stock while it’s in a O.K. to buy if stock price is
50-day moving average [Link]/ downtrend is dangerous, as it above its 50-day moving
will likely move lower. A stock average.
is in a downtrend if its price is
[Link] below its moving average
[Link]/ (MA), and in an uptrend if
above. Use the 50-day Simple
Moving Average (SMA).
Price/Sales ratio (P/S) [Link] Valuation check. A stock with a O.K. to buy if P/S is less
P/S above 10 is momentum than 10. P/S ratios between
priced. 3 and 5 are best for growth
[Link]
stocks.
[Link]/ Buying momentum priced
stocks is only recommended Ratios below 2 reflect value
in a strong market. priced stocks.
Cash Flow [Link] Companies with positive O.K. to buy if Cash Flow is a
operating cash flow are safer positive number.
investments than cash burners
(báo cáo tài chính của
(negative cash flow).
doanh nghiệp)
1
Reflection Investment
What Where Why Action
One-year Price chart with [Link] Buying a stock while it’s in a O.K. to buy if stock price is
50-day moving average [Link]/ downtrend is dangerous, as it above its 50-day moving
will likely move lower. A stock average.
is in a downtrend if its price is
[Link] below its moving average
[Link]/ (MA), and in an uptrend if
above. Use the 50-day Simple
Moving Average (SMA).
Average Daily Volume [Link] Institutional buying is an O.K. to buy if Average Daily
(shares) important catalyst for Volume is 150,000 shares or
share price growth. higher, and above one
million shares is best.
Institutions buy hundreds of
thousands of shares and
prefer stocks with large daily
trading volumes so they can
easily move in and out of
positions.
Fundamental Health Invest, don’t gamble! Stick O.K. to buy
Grade [Link] with companies with solid if Fundamental Grade = A, B or
fundamentals. C
[Link]
(sức khoẻ doanh
nghiệp)
2
Reflection Investment
Got Growth? [Link] Consistent strong sales O.K. to buy if recent
[Link] growth over extended periods quarterly growth numbers
[Link]/ translates to long-term stock are 8% min. (higher is
price appreciation. better). Best case is when
year-over-year (YoY) growth
is accelerating.
Institutional Ownership Lack of institutional ownership O.K. to buy if percent held
[Link] means mutual funds, pension by institutions is at
plans and other institutional least 30% of shares
[Link]/
buyers don’t think they will outstanding.
make money owning the
(thống kê các tổ chức, stock. Why would you want to
ngân hàng) own it?
Number of Analysts A company’s O.K. to buy if a total of at
Making Buy/Hold/Sell Recs. [Link] performance will go least four analysts are listed
unrewarded if nobody knows as currently making strong
[Link]/
about it. buy, buy, hold,
underperform, or sell
Sufficient analyst coverage is
recommendations.
Company Initial essential to create investor
interest, especially from Look only at the total
Report institutions. number of analysts making
recommendations, not
whether there are more
buys than holds, etc.
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Reflection Investment
- - - - - - - - - - Part 2: Advanced Research & Analysis- - - - - - - - - - -
Calculator Required
Gross Margin Trend [Link] Changes in gross margin Gross margin (GM) is the
Báo cáo tài chính percentages from quarter to "Gross Income" divided by
quarter point to changes in a "Revenue," expressed as a
của doanh
company’s competitive position in percentage.
nghiệp its marketplace.
Calculate the GM for each of
Increasing gross margins signal an the past five quarters, and
improving competitive position, observe the GM trend.
and declining margins warn of
O.K. to buy if the trend is flat
increasing competition.
or increasing (best). Ignore
variations of less than 1%,
e.g. from 41% to 40.5%.
Revenue (sales) Growth [Link] Slowing revenue (sales) growth is a Compare the most recent
Rate Báo cáo tài chính “red flag” signaling danger ahead. quarter's (MRQ) year-over
Latest Quarter compared to year sales growth rate to
của doanh
previous quarter & most previous quarters and to the
nghiệp most recent year.
recent year.
Ideally, revenue growth
would be accelerating or at
least equal to earlier
numbers. But, it's O.K. to
buy if MRQ growth is at
least 75% of recent growth
numbers.
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Reflection Investment
Forecast Revenue Growth [Link] Compare consensus Check the forecast year over-
Rate Báo cáo tài chính revenue growth forecasts year revenue growth
to historical numbers. percentage for the current
của doanh
quarter vs. MRQ growth rate
nghiệp found in the previous step.
Ideally, the growth rate
should be accelerating but
it's O.K. to buy if the forecast
year-over-year revenue
growth is at least 75%
of historical year-over-year
growth.
Accounts [Link] Accounts receivables are monies Compute the ratio for the
Receivables Growth vs. Báo cáo tài chính owed by a company’s customers most recent and the year
Sales Growzzzth for goods received. ago quarters.
của doanh
nghiệp The Accounts Receivables Ratio Ideally the most recent ratio
(ratio) is the total receivables would be less than year-ago,
divided by the revenue for the but it's O.K. to buy if
same quarter. the ratio is the same or lower
A significantly higher ratio vs. year than year-ago. Ignore
ago is a red flag pointing to future increases that are less than
problems. 5%, e.g. from 60% to 64%.
