What promotions can not be bought

Buying a stock is always a responsible solution that can be fraught with the consequences in case of incorrect choice.

And today I will tell about several principles and approaches, thanks to which it can be understood that the action has a low investment attractiveness.

Demanding Emitted Load

If the company works for a long time, then for it moderate debt load is not such a significant challenge. When the profitability of entrepreneurial activity exceeds the loan rate, the financial flow with a margin is able to cover the percentage and additional complex situations should not occur.

But excessive debt burden is capable of not only to reduce the profitability of shares, but also to cause the company’s bankruptcy. The score of the debt load is reproduced through net debt / EBITDA indicators. This calculation allows you to determine in advance that the company is vulnerable and unstable. Of course, in this case, it is better to refuse investment.

Shares in free circulation

You can not buy shares of the company with a low free-float. This directly proportionally has an impact on the liquidity of assets. And this indicator is able to limit the weight of the shares in the indices, as well as make it less attractive for investment funds and other major market participants.

Opportunities for business development

Shares reflect the cost of the enterprise. And so that they grow, the Issuer must successfully develop its business. Of course, this indicator depends on many factors, and it is quite difficult to give it a correct assessment. But if the company has no prospects, that is, potential increase in quotations, then buying its shares can not.

External factors

It is important to take into account the legislative restrictions, the economic situation in the world and in a specific region, as well as the successes and product failures on the example of other companies. In addition, it is necessary to pay attention to messages on behalf of the company’s managers or from the authorities. Any of these factors can be as positive and negatively affect the value of the shares.

Learn to analyze the companies and stocks on such criteria, maybe anyone. And for this there are already many specialized analytical services.

Returning to the fact that the purchase of shares is a responsible decision, I also want to say that everyone who invests should have their own strategy and a trading plan. No matter how the action does not behave themselves, you should understand what to do with it exactly, relying on your strategy and horizon. In our consultations, we explain on your fingers, where to start and where to invest savings. Our strategies make money from 8% per annum in dollars.