I think the article is too simplistic to be of real use to lay investors. While there is certainly merit in points 1 and 4 below, what is valuation (point 3 ) is not at all explained to make any meaningful sense. Yes, one can not compare market price of two shares with different face values and one should certainly look at what is the face value is very important but beyond that what should be correct / appropriate valuation has not even been hinted at.Again point 5 , who the promoter is can be very important but how can one take a call on this is not clear based on one solitary example of Indian Organic. It would have been also better if the author had indicated what is his level of investment and average retuns earned in last 10 years ( and not last 2 years --because every single investor should have made atlaest 50 to 100 % in this period) and his age / income level or risk capacity. Without this, it is simply asking gullible investors to go down the garedn path.
1. Look for consistent dividend paying stocks 2. Check valuations 3. View prices over time 4. Look at the promoter's stake 5. Check who the promoter is
I like your comments & I feel within these parameters UCO Bank is a good buy since the stock is trading at 25Rs. & expected dividend is 15%,hence it will give 6% tax free return & the Chairman of the Bank is known to have turned around banks. As far as prometers are concerned it is a PSU Bank.
