Prior to me getting into the tips I would like to first ensure that you know what the next greatest short term stock is going to be. The next best short term stock is a stock that is going to increase in share price dramatically over a very short period of time. What you must watch out for are penny stocks that are hit and miss because often times these will get boosted by fraudulent traders and beginning traders.
Tips On Finding The Next Best Short Term Stock
Low Price To Book Ratio - If you want the next best stock then you need to get one with a low price to book ratio. What you need to understand is the lower the price to book ratio is the better the share will do in the short term trading market of $10 and under stocks. Just watch out for stocks that have a high price to book ratio because they can lose all your money very quickly, my suggestion is to only trade stocks that have a ratio lower than 1.
Check 5 Year EPS Growth - If you don't know what EPS is it is simply "Earnings per share" and the reason why you need to look at this is because it will give you an idea how much the shares will increase year after year. If you are looking at a stock that has a negative 5 year EPS then I would recommend looking somewhere else until they can prove their worth to you. What you need to understand is that most companies will not grow 100% a year and that is why you need to figure out where you want to be and which companies are in the range, a good range would be 10% over a 5 year period.
The last thing you must know regarding stocks is there are a bunch of good ones out there, you need to do the research and find the next hidden gem. Always check the market to see what it is doing because the share prices will go up and down on a day to day basis.
About the Author:
0 comments: