How to select a stock?

3.3 Compare with its Peers

We can study & evaluate the companies we would like to invest in only after we identify the best performing companies in an Industry, Sector or Index.

We need to check the- Net Sales, EPS,Net Profit Margin %, Latest PE and Price/Book Value of the companies to shortlist the good ones.

Let us understand what these financial factors indicate about a company.

Financial Factor	Assessment
Net Sales	A company with a high Net Sales indicates a high ranking in the Industry because it signifies the market share it has.
P/E and/or P/BV	P/E ratio (Price/Earnings ratio) tells us how many times the profit of a Company is the market ready to pay. P/BV tells us how many times a Company's book value is the market ready to pay a price. Low P/E and/or P/BV values are preferred however to invest in the company we also need to check other financial factors.
EPS	Companies with higher profits are preferred.
Net Profit Margin %	A company with a higher NPM % indicates a comparatively higher profitable business. Higher the NPM %, higher will be the rank in the industry

The ComPeer feature at MoneyWorks4me allows you to shortlist a few good companies within an Industry, Sector or Index based on these financial factors.