How to pick Stocks like a Pro? | Ready Checklists for different Investing Styles | CA Rachana Ranade

"Number one as I said the current valuation has to be lower than the intrinsic value. So PB PE both have to be less. PE should be ideally lower than 15 if lower than 10 why not. The lower the better. PB should be less than 1.5 again less than one why not. Then now you should check about the basic fundamentals. Cash flow from operations it has to be positive. You have to check the debt levels whether they are manageable or not. If debt to equity ratio is low at a lower side less than one is good zero is fantastic ok also check the promoter holding inspite of all these things if the promoter has a continued holding promoter has not stolen or has not sold his holding in that case it is a good sign if promoters have in fact increased their holding it is a way better sign but inspite of all these things current market sentiment should be negative for the stock then only then you are going to get it at a cheaper bargain ok so I hope you have understood this entire concept of value investing."

"Step number one you have to ensure that their sales growth and profit growth are at least 15% now why am I saying this it cannot be a company with negative sales growth means acting is only bad right now I am saying that acting has to be good so similarly sales growth has to be good profit growth has to be good return ratios have to be good r e ROC they have to be more than 15% company should be able to manage its capital well debt to equity ratio should be less than five I mean lower the better less than one less than five zero so why not verient it should have a good industry position also if it is an industry leader why not but even if it is fast growing like I said Vicky Kaushal was late to not even in top late to top 20 actors in India back when Masaan was released when Ah let's say when Uri was released he came I am sure he came into top five and now after Chawa I am sure people would definitely argue that he is like the top number one actor in the current scenario right now that's how he was a fast growing actor. Similarly, you have to identify a stock which is growing high up in its industry position. In simple terms, assume that the market share that it had was only 20% and it grew from 20% to 60% market share. That's what I'm talking about as an industry position. Brand Distribution It should have a brand and distribution. It should have a strong moat. The product should be good. It should have a very good position for good position, good proposition for sale as well. And very important it should have a visionary management. The management should have absolutely clear thoughts. This is where we are, this is where we plan to be after three years, after five years, whatever. If the management has a clear vision there are great chances that the stock will perform in the future."

"Now, what you have to check is that there is a strong up trend. So, you have to have a higher high and a higher low for that stock. The second thing is that the volume should be good. People should be interested in this stock. So that is where you can see that yes is a big volume candle that signifies that yes with a good volume a good price move the stock can ideally trend upwards. Third thing you should have is a fantastic breakout. The breakout could be above something like a 52 week high and there could be a breakout from a zone and now it is ready for a higher price level. The variant thing is it should ideally be above the key moving averages. Something like a 200 day moving average, something like a 50 day moving average. That shows a better strength in that stock. But it is extremely important that you should have an exit strategy as well. Because there is a possibility that you enter a you know you are doing that jet surfing is what it is said I guess. You give the wave is starting. The sea wave is starting. You jump on that. It's at the highest point. That is very you have to actually exit the stock. Because otherwise if the wave crashes and then you want to exit what is the use. So for sale strategy you should have a proper exit plan when you are going to sell. And if the wave doesn't actually rise to the level that you wish, it just starts to rise and it just subsides there itself. In that case you should also have an exit strategy and stop loss plan basically. It could be something like a previous swing low. It could be based on moving averages or whatever. So I hope you have understood how to identify momentum stocks."

"As a pro tip always remember that when is when it is about value investing. It's like you're identifying a stock which is underrated right now for a stock to go from being underrated to reaching its true potential. Well that's not going to happen overnight. So ideally, true value investing category stocks should be a part of your core portfolio which is going to be there as a long term part of your portfolio."

"And If It Is About Momentum Investing. For momentum investing it is like you just ride on the trend and you get out of the trend when you feel that the buzz is just fading away. So for momentum investing, those stocks and such stocks could be a part of your satellite portfolio. They come in your portfolio. When the bus is there and you exit, that's when you take it out from your portfolio before the overall buzz fades off."