I might not be a greatest analyst but as i feel after alalysing the stocks from technical analysis tool of Dynamicslevel.Com, i feel Sector-wise banking stocks that can be quite bullish at future, since the tool is giving instant updates and notifying if this breakk out it done what will be its next suport and resistance zone.
I look at the management first. The management is the most important and lest talked about aspect of a company.
2) I like to know what business the company is into and then look at whether it is scalable. I prefer new sectors since the growth is highest there. I avoid cyclical because I cannot predict the peaks and troughs.
3) I then look at the market cap. If it is below Rs 1000 crores I think we could pay a higher PE to that company
4) I would then look at the RoE to see if the company is using its capital efficiently. RoCE is a better concept though because you could hike the RoE by using debt but not the RoCE
5) I would then compare the PE with the growth and the RoE. If there is a big difference between RoE and growth then the company does not merit investments. This is so because for a company to grow at higher rates of growth compared to its RoE it would have to dilute capital. That hurts
6) Dividend, book value is something that I look but do not base any of my decisions upon. I think that they tell you what the company has done and not what it will do.
NAME CMP SIGNAL S/L
AXISBANK 870.10 BUY 855.40
ICICIBANK 744.85 BUY 740.70
IDFC 137.60 BUY 135.20
KSOILS 56.20 BUY 54.35
ORIENTBANK 168.10 SELL 171.25
RELINFRA 1188.15 BUY 1163.10
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