There are plenty of things you can look for in a stock that makes it a good investment.
- Cash flow is very important. Income statements. LOOK at balance sheets. You can find all of these on Google finance.
- P/E A higher P/E ratio means that investors are paying more for each unit of income. Look for low P/E
- Look for "best of breed" as all investors say.
- High yielding stocks eg. 6% 7% 8% not stocks that are yielding at 20% and 30% like shipping companies.
- Look for companies with little or NO debt.
- The float. A low float makes a stock very volatile.
These are just some tips on what to look for. Please leave comments and tips. Thanks!
Very good advice. Wish I had known these things earlier in my life. If you follow these tips, you will save yourself a lot of losses.
One other thing I look for...steady and predictable eps growth.
Low P/E is also very important like you said. Stocks with high P/E fall the fastest.