Generate Value

When a particular companies share value goes down ? goes up ? how to predict the growth of the company ?

Before buying a share, what things we need to analyse in market with respect to that particular sector & Company....

Public Comments

1. The share value will go up and down based on supply and demand. Over the long term, supply and demand should reflect the growth of the company but it doesn't have to. For example many companies are currently trading at low prices purely because of market volatility. Their long term growth prospects haven't changed, all that has happened is that investors have lost confidence in the market. I'd argue that if you were interested in Exxon as an investment back in November you should be even more interested when you look at where it is trading today. There has been no significant change in the company's prospects for the next five years. So...in terms of things to analyse. 50% of your judgement should be based on market conditions. Which is why people are bbeing cautious right now. Next consider the sector. There are plenty of good banks out there right now which are unaffected by the credit crises. Unfortunately the market will treat them as toxic for 6 months. Finally consider the company. Look at valuations, management, growth rates. Look for unique factors - why is it better than the competition? Is it protected from competition? If there is a company in the sector that is clearly superior, be prepared to pay a higher valuation for it.