My method is pretty simple : find undervalued companies with good earnings and good perspectives. I focus on small companies : studies show they have greater return than big caps.
Ok that’s very common, let’s develop a lille bit :
- Undervalued : I pick companies with low Price to Book (P/B) ratio. Under 0.6 is perfect.
- Good Earnings : I pick companies with low Price Earnings Ratio (PER). The lowest it is, the best it is. I try to avoid PER superior to 10 and like to buy around 3 and 5. I’ll buy high PER only if growth rate is big and superior to PER.
- Good Perspectives : I look for an increase of net income over the last years. with a strong growth on revenues and EPS.
- Printing money : though a positive cash flow (not though dilution)
I will try as possible to diversify my holding between 🇺🇸 America, 🇪🇺 Europe (mainly 🇫🇷 France) and 🇯🇵 Japan.
Small holdings in others Asian markets can complete my positions.
I use mainly 3 sites for checking financials :
- Yahoo Finance : for fast analysis and having a global view. Be cautious on the financial category, sometimes for nano caps results are incomplete or falses.
- Kaijinet JapanExpress : you will find there all English datas you need for Japanese stocks. I like their stock screener, it’s sad they limited it to 3 items.
- OTC Markets : reference for datas about OTC stocks. Like for Yahoo Finance, I recommend that you check the officials companies reports. OTC Markets financial category can have some mistakes and isn’t everytime updated properly. Hopefully you can find reports easily at the bottom of overview category.