Red Weekly Author | Zhang Changhua
After the strong rebound in the past month or so, the market has begun to have new differences on how to interpret the market outlook. The author believes that adhering to a cost-effective approach (not blindly chasing the so-called track stocks and leading stocks that have no cost-effective advantage) should be a good strategy. The author here shares the "Five Looks" method for finding cost-effective stocks.
looks at whether the industry complies with industrial policies. We should be very cautious about industries with serious overcapacity or those that have begun to enter overcapacity; for emerging industries, industry leaders that represent development trends, and are constantly being innovated and updated by enterprises, if the valuation is too high or blindly hyped, we should remain vigilant and wait for its valuation. Only consider whether to enter when it enters a reasonable range.
Look at the price-earnings ratio and price-to-book ratio. On the premise that complies with industrial policies, has a low price-to-earnings ratio, has a low price-to-book ratio, especially those corporate stocks whose stock prices are significantly lower than their net assets and whose price-to-earnings ratios are also low should be focused on. Considering the continuous lifting of the ban on large and small debts accumulated in history, the increasing supply of new stocks issued at high prices, the continuous generation of new low-cost large and small debts, and the lack of new funds entering the market, the changes in market supply and demand and market rules will eventually It is a high probability event that the market will enter a rational era in which most stock prices return to net assets and focus on cash dividends.
Look at the dividend rate of real money and cash dividends. At present, technological progress is changing with each passing day. Whether it is real innovation or fake innovation, ordinary investors often lack understanding of related technological innovation fields. It is better to make steady investments, buy safe stocks, and make stable money. While paying attention to the low price-to-earnings ratio and low price-to-book ratio, focus on the dividend rate of its real money cash dividends. Cash dividends should be paid special attention to if the dividend rate is above 4.5% after deducting 20% dividend income tax after holding the shares for less than one year, the performance is growing steadily, and the cash dividends are increasing year by year. Because even if the stock price stagnates , the continuous cash dividends have a higher safety factor than the one-year bank financial management income, and if you hold the market value of the stock, you can selectively participate in the subscription of new shares to obtain income. For those stocks whose cash dividends appear to be high on the surface, but whose dividend yield is actually lower than the high stock price and whose one-year bank financial income is not as good as the one-year bank financial management income, and whose sustainable growth advantage is not obvious, do not be fooled by the superficial phenomenon of high cash dividends. confuse. Stay away from corporate stocks with high price-to-earnings ratios, high price-to-book ratios, low cash dividend spreads, low dividend yields, high levels of executive compensation and a lack of sense of responsibility for investors. For those stocks whose stock prices are high but technically appear to be low, don't simply be superstitious about technology. In principle, we do not participate in subscriptions for those GEM stocks that are issued at high prices and make big money, including the so-called science and technology innovation board stocks that have suffered losses or even suffered huge losses for three consecutive years and have a halo of technology.
Check the size and proportion and whether it has been fully circulated. In terms of new shares, if the issue price is too high and the proportion of large and small non-profits is large, the risk will be great, because the cost of large and small non-profits is generally 1 yuan, and some are even lower after multiple transfers, even if you enter a few years before listing. The cost of so-called strategic investors is generally much lower than the issuance price. This type of new shares generally has more risks than opportunities. For old stocks, if the size is large and the proportion is high, especially for some stocks that have been converted into shares many times and the stock price appears to be low on the surface, but in fact the stock price is still quite high after the rights are restored, beware of falling into the trap by mistake.
choose the opportunity to enter based on the technical trend. should not only look at the trend of the market major indexes, but also focus on the choice of stocks . Some stocks have been declining for a long time, but their fundamentals have continued to improve, and there will be many stocks with strong cash dividend capabilities that can give investors better returns. Investment Opportunities. We should pay attention to the opportunities of high-quality stocks in several technical trends such as building a double bottom triple bottom , making a new low and falsely breaking a position, breaking through the trend and stepping back on the support level, etc., and choose the opportunity to intervene in batches under the premise of controlling the position .
In actual operation, if the above-mentioned "five things to look at" and all five conditions are met, of course we will look for opportunities to open or increase positions, but it is difficult for the market to give us this opportunity. Sometimes, it will rise strongly soon when it is close to the previous low.The market is changing dynamically. Sometimes the above five conditions cannot be met. You can also start with three conditions. For example, some energy stocks are in line with industrial policies. Their performance has been growing steadily since their listing. Cash dividends were good in the past few years, but last year because of The price of commodity has skyrocketed and there has been a huge loss. Generally, there is no distribution in the annual report announcement, but its price-to-book ratio is low, and the stock price is 20%-30% lower than the net assets. Normal profits returned to normal profits in the first quarter report of this year, and most of them have rebounded strongly. We should proactively study and judge changes in the fundamentals of individual stocks, and understand that sometimes risks and opportunities coexist. When risks seem to be opportunities, we should seize the opportunity to enter in a timely manner, and combine medium and long-term holdings with high selling and low buying band operations organically Combined, they can obtain better investment returns in a market where it is difficult to make a profit.
(This article was published in "Red Weekly" on June 18. The views expressed in the article only represent the author's personal opinion and do not represent the position of "Red Weekly". The mention of individual stocks is only for example analysis and does not make trading recommendations.)
