CA Final
77 Points
Joined January 2010
if u see the financial statements
make sure that the comapany is generating enough cash flow from operations by verifying the cash flow statement and it is declaring dividends on a consistent basis i.e you should atleast get the return by way of dividends which is equal to or greater than the return you would earn by placing the amount you invested in the company in any bank account
see the EPS of the company and also stock high's and low's which is disclosed in the annual report so that price movement can be verified if the fluctuation is very high the stock is risky and if fluctuatuion is minimum then it is fine.
but remember that there is no rule that financial inforamtion is true and correct
also demand and supply of the stock in the stock market also drives the stock price