9 things to check before buying a stock

Hi guys
Myself Bittu Kumar and today is 25th of march.In this blog i'm going to share some tips that you should must see before buying any stocks from markets.
                               

9 Things to check before buying a stock

1)Check promoter's Background

Evaluation of Management is the most important thing you have to check before picking of any stocks from market. You must should read delivery party transaction and check out if there is a suspicious transaction is there or not. If happens then you must sell your share immediately. You must read Management Strategies his past record from google or check out whether that company have any dispute with SEBI or not.

2)Salary of Key Managerial Persons(Promoter or Management)

No company give more than 5% salary of its net profit to its one managerial person. If there is more than one person Maximum 10% of net profit given to like a salary. You can check it from ANNUAL report of any companies. 

3)Related party Transaction

Transaction which is done by promoter from its other entity or from relatives. If any companies is doing something like that then you should away from that companies.

4)Management's obsession with share price

Management should go for long term thinking not for short term.

5)Management Presentation and Forecast

You can check companies future from annual report from 

• Directors report
• Management Discussion 
• Analysis

6)Dividend Payments

It is not important if a company giving Dividend then it is good. We should check Free Cash Flow it is positive or not. and we should check companies is giving reserves in a good manner or not.

7)Accounting Manipulation

Some Companies increase or decrease their sell or their profit in his report. One should get away from the companies.

8)Promoter's stake in business

If any promoter's shares having more shares in his own companies or they are increasing this percentage then it is a good sign for stakeholders.

9)Don't rely on awards

Its not important that a companies having more award is good in future. Award may be misleading.