Stocks Analysis

Today’s topic is “Company Analysis”

There are three types of company on basis of market capitalisation.

[Market capitalisation mean = Total outstanding shares * current price of shares]

· Small Cap (capitalisation)

· Mid Cap

· Large Cap

Small Cap: The company which have less than 5000 crore.

Mid Cap: Companies which have 5000 to 20000 crore cap.

Large Cap: Companies which have more than 20000 crore cap.

Phases of company go through.

When company start that called ‘company birth’. At this company exist in physical form but nobody knows about company operations. Only the person who starts business knows.

When company start raising fund and involving investor in their company then company become young company. That time only certain investor allows to invest in the company with certain amount. If you invest in the young company you can’t rest for long time because many of young companies become bankrupt. The biggest problem with young companies is they are out of cash to operate their business.

When companies raise fund through angel investor or companies goes public that called middle age. The one thing that always happened with these company is they suffer with sort of crisis. This crisis called midlife crisis. The growth is slow than young companies.

Companies that are twenty, thirty or fifty years old that called “old company”. That time growth of company is constant. At that Time Company should make new products, enter in specific new market or takeover other companies. If companies do these things then companies grow otherwise investor loss their trust on company. As an investor you should analyse in which company you invest and what are the fundamentals of company.

Heroes

In school , we debate whether Hamlet is a hero or a wimp, or whether King Lear was stupid or a victim of a greedy daughter, or Napoleon was a great general or a land-grabbing tyrant. But we never debate whether Sam Walton is a villain or a hero. Sam Walton got rich by starting Wal-Mart: was this a good thing or bad thing? What about Michael Eisner at Disney? Is Eisner a rich pig or a corporate saviour?

Joe Montana, who played football, is a national celebrity who is nearly deified for his great contribution to society. No doubt he is contributed. But how does Montana stack up as a hero against Sam Walton or Lee Iacocca at Chrysler? Who, for instance, he created more jobs? When corporate leader become rich with this many of them got jobs, society become advance and national economy grow with it. There is not alone person get benefit from.

The corporate leaders of America are not just a gang of moneygrubber who main purpose in life to ride on learjets to the golf courses of the world, FedEx Smith didn’t start Federal Express because he needed money; Smith was already rich. He did it for challenge, to create a mail system that works better than the post office. Because Smith succeeded, the post office has shaped up considerably. Now, in addition to delivering mail in rain, hail, sleet and snow the postal service can even delivering over night.

You don’t need right all the time. If your portfolio is occupies ten companies. In which three of them become multibaggers, five of them perform ok and two of them perform worse. You make good profit in this scenario.

If you have a computer or Smartphone with internet access then you don’t need broker advise and save your commission that owe to pay advisor.

Here some data that helps to understand companies:

Multibaggers stock and financial statements

If a picture is worth a thousand words, in business , so is a number. No matter what CEO says in a text of annual report , the number in the back of the report gives you the complete, unvarnished account of company's behaviour. If picking stocks become your hobby, do yourself a favour and take an accounting course.

You should learn to decipher(understand) the numbers of balance sheet. Balance sheet is a list of everything a company owns as well as everything it owes. It similar to list of pluses and minuses you might make about your personality.

Multibaggers stock in 20th century