10 Tips to Identify a Hot Stock


Bangalore: Investment in stock brings a good return in the long run. But stock investment is not simple and not even always profitable. One needs to do an extensive stock research before entering into this volatile financial market. There are some important numbers and ratios which you must look at to understand the company's finances better and plan your investment.

Important Note: You can find this ratio listed below in the financial statement issued quarterly and yearly by the companies. Mainly there are 3 types of financial reports; income statement, balance sheet, and cash flow statement which you need to observe.

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1) Growth in the Earnings Per Share (EPS)

Earnings per share (EPS) are revenue earned by the shareholders on each share held by them. EPS is measured by dividing the company’s profit earned by the total numbers of shares outstanding for the company.

When the financial report of a company reveals a year on year increasing EPS, it means that the shareholders of the company are earning more, year on year. Investing in such company will help you earn a better return.

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