Getting the right stock to invest in requires due diligence in assessing the company profile; it ups and downs, the company's ability to withstand economical shock, its growth rate or dividend schedule, depending on what aspect of investment you seek to gain at the later end.
There are stocks that grow over time for investors to resell their owned assets and cash out on a good profit, while we also have stocks that are pronounced dividend kings, you earn some certain percentage as long as you hold on to your share when the company makes profit.
That being said, there are also stocks that strive on the two (2) points, which is why due diligence is essential.
The Nigerian Stock Market is a slow but steady market, less volatile than the US market, not to mention known fraud cases of few companies down the US history lane, also the current Nigerian share market prices per unit are very much affordable.
Back to the point of doing due diligence which many call valuing the company (assessing its total economic value) has it methods which include:
1. Substracting the company liabilities from its assets
2. Estimated cash flow the company is expected to make for a given period
3. Adding the company's debt and equity, then substracting its unused cash from it
4. Need to understand how to arrive at the company's earnings before interest, taxes, depreciation, and amortization
5. Value the company's growing perpetuity, if there's any.
With all that being said, one good advice is mostly to avoid IPOs (Initial Public Offers) especially as newbie investors, also avoid stocks that are quite over priced i.e: stocks that has grown overtime and surpass its main price, these things do have draw backs, what we call corrections in forex trading, it's absurd for a market to continue growing without encountering challenges upfront, that's why a graph goes up and down, if the company can surmount the challenge it picks again from where it fell or it stays at that point if it can't or probably continue to decline until it gets to the point where its resources can effectively handle the economic storm and during this period would be where you most like might hear of some staff getting laid off and all that.
As of the time of writing this piece, the Custodian Investment seems a very good choice to invest in, up to date with it's dividend, it weathers any storm it face and has been on a steady growth in the past five years.
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