Do you ask yourself everyday how is my portfolio doing? You need to get a life. But I hope this helps you.
In order to tell how a company is doing, you need to know how fast a company is growing, which is measured by revenue growth (sometimes called sales growth), and how profitable a company is, which is measured by earnings.
In order to tell how a company is doing, you need to know how fast a company is growing, which is measured by revenue growth (sometimes called sales growth), and how profitable a company is, which is measured by earnings.
Know which industry-specific metric is important to be able to judge a company.
- For a cable company, the key metric is enterprise value (market cap plus debt) divided by the number of subscribers.
- For a hotel, the key metric is average revenue per room.
- For airlines, it's average revenue per seat.
- For retailers and restaurants, the key metric is same-store sales.
- For tech stocks, it's gross margin per product sold.
- For financial stocks, it's net interest margin, i.e., how much money was made on each dollar the financial institution had in assets.
Once you know the key metric, compare it with the company's peers. The retailer with the best same-store sales, for example, is the one you want to own. Similarly, you want to own the tech stock with the best gross margin, he said.
Let me know if you want to be removed from this list.
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