How to find undervalued stocks

How to find undervalued stocks

As we all know, active investing is the way for short term profits. I think of active investing as value investing, as I claim I'm a active (value) investing. With that in mind, most people don't look at a company's market cap as value. So make sure the company in question has a good size market cap, which will also provide room to grow.

Search Criteria:

Any Dividend Yield

- Smaller companies reinvest their dividends

Low PE Ratio

- PE a company's stock price over 12 mos. earnings.

Low Trading Volume

- High, wall street has done found them and talking about it.

High New Profit Margin

- Indicator of strong management

Low 12 month relative strength

- Stocks that have underperformed in the last year are some of the best buying opportunities.

Low debt to equity ration

- Invest in companies that create cash, not debt

High Rev growth year over year

- Better than Qtr. to Qtr.

- Show hints of long term trends

If you search turns up 20 results, pick the 4 to 5 best stocks. You don't have all day. You may miss your chance.

13F Disclosure Form

Some of you may have heard of the new 13F Disclosure Form. Some of the top investors where throwing a huge fit about it. The public did not pick you on the 13F Disclosure Form as the top investors had first thought.

11 Technical indicators - over looked indicators

1. MACD - moving average convergence divergence

2. DMI -  Directional Movement Index

3. RSI - relative strength indicator

4. Bollinger Bands

5. 50 Day moving average

6. 200 Day moving average

7. 1 Year weekly chart view

8. Multi-Year monthly chart view

9. Candlestick charting patterns

10. Money flow indicator

11. Slow stochastic

As biotechnology is today's emerging industry, play around with this information and see what you come across.

Happy Trading!