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How to Find Undervalued Stocks to
Trade
By Dona Paul
http://pennystockstraders.com/
What are Undervalued Stocks?
 Stocks being sold for a
price presumed to be
below their true value.
 As if they were on sale.
Why Buying Undervalued Stocks
 Since they’re being sold below their value
– More rewarding
– Better chance to increase in price
– And cheaper obviously
How to Look for Undervalued Stocks
 First know how to use
your stock’s screener
– It’ll make your job much
more easier
– Stick to one sector
– Look for your
characteristics
How to Look for Undervalued Stocks
Cont.
 Secondly, look deeper
– More information is needed (always)
 Look at their financial activities
 Look for their debts
 Look for cash flow
Price/Earnings Ratio (P/E)
 This ratio is helpful when looking for
undervalued stocks
 With this ratio you compare a company with
another within the same sector.
 A lower P/E is considered to be low in value
– Always look for more info
– Don’t start trading
Debt-to-Equity ratio
 Another very helpful
ratio
– It should be less than 5
– Meaning there isn’t too
much debts
– Don’t buy stocks with
lots of debts
Current ratio of the stock
 Current ratio
– Should be greater than 2
– No stock with a lower
ratio than that
– That’ll tell you how this
company is doing
financially
Conclusion
– Undervalued stocks can be very beneficial
– You have more chance to profits from them
– Always look into all the info you can find
For more information, visit us @
http://pennystockstraders.com/
Photo Credits
 Greaterdiversity.com
 Thehotpennystocks.com
 Sacredhearthidalgo.org
 Knowledge.rhbinvest.com

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How to find undervalued stocks to trade

  • 1. How to Find Undervalued Stocks to Trade By Dona Paul http://pennystockstraders.com/
  • 2. What are Undervalued Stocks?  Stocks being sold for a price presumed to be below their true value.  As if they were on sale.
  • 3. Why Buying Undervalued Stocks  Since they’re being sold below their value – More rewarding – Better chance to increase in price – And cheaper obviously
  • 4. How to Look for Undervalued Stocks  First know how to use your stock’s screener – It’ll make your job much more easier – Stick to one sector – Look for your characteristics
  • 5. How to Look for Undervalued Stocks Cont.  Secondly, look deeper – More information is needed (always)  Look at their financial activities  Look for their debts  Look for cash flow
  • 6. Price/Earnings Ratio (P/E)  This ratio is helpful when looking for undervalued stocks  With this ratio you compare a company with another within the same sector.  A lower P/E is considered to be low in value – Always look for more info – Don’t start trading
  • 7. Debt-to-Equity ratio  Another very helpful ratio – It should be less than 5 – Meaning there isn’t too much debts – Don’t buy stocks with lots of debts
  • 8. Current ratio of the stock  Current ratio – Should be greater than 2 – No stock with a lower ratio than that – That’ll tell you how this company is doing financially
  • 9. Conclusion – Undervalued stocks can be very beneficial – You have more chance to profits from them – Always look into all the info you can find For more information, visit us @ http://pennystockstraders.com/
  • 10. Photo Credits  Greaterdiversity.com  Thehotpennystocks.com  Sacredhearthidalgo.org  Knowledge.rhbinvest.com