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At 04:24 PM 1/9/2008, you wrote:
Bob,
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Please which criteria you use
to identify those stocks which have the greatest upside
potential.
Claus,
I use many methods to find value in the markets but I'll try to out-line
one for you. When there is a hot sector such as was the case with
solar, I look for companies in that sector with a few qualities that meet
my criteria. One of those is that the stock must have positive
earnings now. It must have a good growth history and a strong
forward earnings forecast. I look at the value of the firm based on
assets versus total liabilities which also tells me if they will be able
to stay in operation for a long time frame without any cash infusions
from borrowing or issuing more stock. I then look at the
possibility of a merger or take-over of the firm by a larger competitor
based on how much of that activity there is in that sector. Once
all the negative earnings firms are tossed out and the firms with a low
asset to liabilities are gone, and firms with a negative growth estimate
are removed, there will be few choices left. At that point, it
becomes necessary to read the last financials of each of these firms and
a close analysis made of what I believe the prospects are for each.
I then pick the best of those left and will invest in the one with the
lowest PE available either from a trailing or forward status.
I hope this information resembles what you were looking for and I wish
you good trading
Bob
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