Use These 5 Criteria to Eliminate 98% of Stocks š
āæ” Consistent Revenue Growth ā Revenue should grow steadily for the last 3ā5 years. Avoid companies with erratic or falling sales.
⿢ Healthy Profit Margins ā Operating margin above 15% is ideal (varies by sector). Low margins mean weak pricing power.
⿣ Low Debt-to-Equity Ratio ā Below 0.5 is safer (except for capital-heavy sectors). High debt increases risk.
⿤ ROE Above 15% ā Indicates efficient use of shareholdersā money. Below 10% can be a red flag.
āæ„ Positive Cash Flow ā Profits should come from cash operations, not just accounting numbers.
š” Pro Tip: Even if a stock passes, check valuation ā quality can stillĀ beĀ overpriced.
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