Every stock selection system has its own take on how to select a profitable stock. Each system has ways of limiting loss and hopefully maximizing gains. Unfortunately, even with all the educational material available to the stock investor, it seems most are still picking poor stock and losing money. Here are several red flags to pay attention to when selecting stock, to avoid investing in losing propositions.
One red flag to pay attention to is unstable earnings. If a companys earnings and growth are volatile, you can expect the companys stock to follow suit. Large expansions, company restructuring, and other large expenses can temporarily set back a companys earnings, but a companys general picture should show that the company is consistently growing and pulling a profit. In fact focus solely on stocks with super earnings growth. this is what the big funds love and when they buy in they wil lcreate the trnds for us to profit in. With so many choices there’s no point in leaving your money in B stocks whn there is great money to be made in A+ stocks.
Another red flag is a company that is heavily in debt. While many companies enjoy the benefits of leveraging...