RE: Margins and Profits5 Apr 2020 16:59
hhbb8833, above you will find a tab (if using you tablet or PC which underlines the fundamentals of a business. You will see how many shares this company has 68 million, and you know the share price (middle number). Hence you see a market cap of 131 million. Know you will al so see the company has a negative PE number. This normally bad news as it means the company is making a loss. One of the key positives is this based on last year. Today the story is very different for obvious reasons. One of the things investors look for is companies which are undervalued. This means companies have new products and revenue streams which have huge potential which will drive the share price upwards. Often, the big investors don’t jump on board until later. One of the biggest rewards for investors is finding these before the big investors jump on board. NCYT is one such business. They don’t stand out quite so clearly as this one mind. The reason clearly does not need to be explained.
One of my other key holdings is another clear winner. It’s market cap is lower than NCYT, but it is making strong profits. It has a broker advice around 80p but it’s share price after the outbreak of CV has dropped to 9p. But forward projections take it in 2 to 5 years takes it into £’s not pence. It has a positive PE and the market it supplies is growing.
If you want to find solid investments this is a good way. But it takes research and understanding. To many investors look on the risers board and then research, buy in and mostly lose.
The other way is to play the slow game buying large profit making companies with strong dividends. Or buying funds with proven history, one such fund is Fundsmith. This is not advice but an example if a fund made up of some of the strongest growth businesses in the world. It has an average growth of 20% per year. But, even at this time you will see it has dropped.
Markets worth looking at today are pharmaceutical companies and funds and other growth areas are renewable energy storage companies or higher risk are mining companies producing high value in demand minerals. Areas like Hydrogen producers could be a strong future market. The key is a balanced portfolio if you have limited experience.
I wish you success, try and find a mentor, but don’t jump in blind. The Covid19 solution will be solved with the mantra “Test, test, test” and find a vaccine.
To investors, it should be - “Research, research and research.” Read the company website, look for interviews of the CEO’s. On AIM try the ‘Crux Investor’ on YouTube. You will learn lots.
Hope this helps.
Cheers RK
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