Picking a stock to invest in and profit from is not easy. If it was, everyone would be making tons of money from the stock market. People and companies spend years (and millions) developing and fine tuning an approach to selecting stocks using complex mathematics and powerful computers.
Does that mean that ordinary investors like us are out luck? In my opinion, the answer is NO.
I believe that by studying the foundations of finance and investing, you can still pick stocks that earn you a healthy return. In fact, I would highly encourage you to read some of the classic books in this field like The Intelligent Investor and Beating the Street. These books are a great way to get one (big) step ahead of other causal investors.
In the remainder of this post I will share with the 8 key ratios or metrics that I look at when evaluating whether to invest in a stock.