Good Stock Picks - How To Find The Right Stocks Quickly

Every investor wants to know of the good stock picks simply because everybody wants to earn a good profit. The profit can come either from the dividends issued on the shares or from the sale of the shares after their values have soared. The problem is that it can be difficult to separate the good from the bad when it comes to stocks because of the sheer number of companies on the market.

But don't let that stop you either. You can apply the following tips in looking for the best pickings in the stock market by also looking at the following factors.

First, keep in mind that the stock markets and the traded shares all boil down to numbers. So, the first thing that you must look at is the financial health of the companies being considered for investment purposes. As a general rule, the most important ratios in determining the good stock picks are as follows:

• Earnings per share growth rate (EPSGR) refer to the incremental value of the Earnings per Share (EPS) within a specific timeframe with a per-year basis as the most common. The higher the rate, the better it is against its competitors. We suggest going for a company with a minimum of 10% EPSGR.
• Return on equity (ROE) is computed as net income divided by shareholders' equity. Thus, it is a measure of the company's profitability and your probability for getting a profit on your investment. We also suggest a minimum of 10% ROE.
• Debt to equity ratio (D/E) is computed as total debt divided by total number of equity. The ratio shows how much of the company's operations is being financed by debt. Go for companies with a maximum of 60% D/E - any company with more than 1 D/E is high risk.

When you have considered these financial ratios, you can start looking at the other criteria for good stock picks.

Second, the Internet and traditional media has plenty of professionals like investors and analysts offering all sorts of advice on stocks and other investment opportunities. The problem is that their opinions will clash on almost all issues from the best time to invest to the best investments to put your money in. So, how do you separate their advice into good and bad?

It's simple when you come to think of it - look for someone you can trust where good stock picks are concerned. This person can be a commentator on an industry television who is also known to be a successful investor although you must also take the time to check up on his claims. This individual can also be a well-known figure like Warren Buffett who often gives hints as to which companies are good investments.

Of course, just because Warren Buffet says that a certain company or industry is the Next Big Thing does not necessarily mean that it is the best thing since, well, sliced bread. You must always do your own research into the market trends. Read the newspapers. Listen to the news. Analyze the forecasts.

Indeed, being the first one to know and then invest in the good stock picks will work to your advantage. Just be sure to know how that works, however, because ignorance is not always blissful.