What's the Best Stock to Invest In?

If you're similar to stock market investors you've struggled with finding the best stocks to invest in.

There are several approaches to find the best stocks to invest in. But first you need to decide what method works best for you go now.

Basically there are two main types of stock market investing

1. Purchasing growth stocks

2. Purchasing value stocks

Growth stocks are companies that are growing fast in earnings. There are a lot of advanced and medical growth stocks.

Value stocks are stocks that are undervalued since they trade at a cheap set alongside the company's fundamentals (i.e. earnings, dividends, sales etc...)

Growth stocks generally will fatten your banking account faster but there's more risk whereas value stocks will generally grow at a slower more sustainable pace but probably won't offer you ulcers.

Here's what some investors look for in a growth stock (based on my knowledge of the National Association of Investors Corporation (NAIC) criteria):

1. Strong Earnings Growth - either quarter to quarter or year over year

2. Strong Forward Earnings Growth - analysts estimate what earnings is going to be for another quarter or year, if they estimate growth that's a plus.

3. Profit margins - you'd prefer the business to be making a large amount of profit to sustain further growth

4. Return On Equity (ROE) - look for growth in ROE or a well balanced ROE

5. Doubling in 5 years or less - you'd like the stock to double in 5 years - look at what the analysts estimate for price potential.

Also here's what some value investors look for:

1. Shares price below intrinsic value

2. Low Price to Earnings (P/E) ratios

3. Price to Earnings Growth (PEG) ratio below 1 is good

4. Stock price is less than tangible book value

5. A debt to equity ratio below 1

6. The company's assets should become more compared to company's liabilities by at the least one factor of 2

7. Dividend Yield within 1/3 of the amount of the AAA bond yield

8. Earnings growth of at the least 7% per year for days gone by 10 years

There are a variety of different ways to find the best stock to buy but this will offer you a starting point.