Saturday, October 19, 2013

What factors constitute to discount buying on equities?

When we buy a stock, we're actually buying a piece of business that we actually want to own. With more than 700++ listed companies on SGX, how do we filter out bad companies and information to find the gems that we wanna owned?

These companies listed in the market are transacted with a buying and selling price. We may inadventlty  buy a price that could be too high (premium) or a dirt cheap company that could be an empty shell company. Using a basic criteria, i have grasp a few points to note. They are:

  • buying a stock below/at its book value with a margin of safety
  • low current debt to asset ratio
  • dividend returns at 2x higher than the 10 yr treasury yields.  

DISCLAIMER The ideas expressed in this blog should not be used to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.

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