How To Pick A Stock

Summary

This video script offers five key criteria for selecting stocks with long-term growth potential. It emphasizes the importance of companies with positive and increasing earnings per share, a low PE ratio relative to historical data, a strong balance sheet with assets exceeding liabilities, a profit margin greater than 20%, and a history of stock buybacks. The script introduces the Stock Sage app, a tool that simplifies finding stocks meeting these criteria for a yearly subscription of $129.

Takeaways

• 📈 The video discusses five key factors to consider when selecting stocks that are likely to grow in value over time.
• 🏢 The first factor is ensuring the company is profitable, as many stocks on the market do not make money and owning such stocks can be a risk.
• 🔍 Use tools like the 'Stock Sage' app to identify stocks that have shown positive earnings for at least the last three to five years.
• 📊 Look for companies with increasing earnings per share over the years, indicating growth and a potentially good investment.
• 📉 Consider the price-to-earnings (PE) ratio, aiming for stocks with a low PE ratio compared to their historical performance to buy at a good price.
• 💰 Check the company's balance sheet for strength, with total assets exceeding total liabilities and current assets being higher than current liabilities.
• 📋 A healthy profit margin on the income statement, preferably greater than 20%, indicates a company that is efficient at turning revenue into profit.
• 🔁 Watch for companies that are buying back their own shares, which can be a sign of confidence in their own stock and can increase the value of remaining shares.
• 🚫 Avoid stocks that are continually issuing more shares as this can dilute the value of existing shares and is not a sign of a healthy company.
• 📊 The 'Stock Sage' app can filter stocks based on these criteria, making it easier to find fundamentally sound investments.
• 💡 The importance of not just focusing on well-known names but on stocks that show consistent growth and financial health is emphasized.

Q & A

What is the main topic of the video?

The main topic of the video is to explain the five key factors to consider when picking a fundamentally sound stock for long-term growth.

Why is it important to check if a company makes money before investing in its stock?

It is important to check if a company makes money because stocks represent shares of a company, and their value increases when the company is profitable and growing, attracting more buyers than sellers.

What does the video suggest to look for in a company's earnings history?

The video suggests looking for a company with positive earnings per share for the last five years and a trend of increasing earnings over that period.

How does the Stock Sage app help in identifying stocks with positive earnings?

The Stock Sage app automatically pulls up stocks at their annual low price that have positive earnings for 3 to 5 years from the last five years.

What is the significance of a company's PE (Price-to-Earnings) ratio when evaluating its stock?

The PE ratio is significant as it helps determine if the stock is overvalued or undervalued relative to its earnings. A low PE ratio compared to historical levels may indicate that the stock is undervalued and due for an increase.

Why is the balance sheet important when analyzing a stock?

The balance sheet is important because it shows the company's financial health, with a preference for companies where total assets exceed total liabilities and current assets exceed current liabilities, indicating financial stability.

What does the video suggest about a company's profit margin?

The video suggests that a company's profit margin should be greater than 10%, and ideally greater than 20%, indicating that the company is not only making money but also managing its expenses efficiently.

What is a stock buyback and why is it a positive sign for investors?

A stock buyback is when a company repurchases its own shares, which can be a positive sign for investors as it indicates that the company believes its stock is undervalued and also reduces the number of shares available, potentially increasing the value of remaining shares.

How does the Stock Sage app help in identifying companies that are buying back their stock?

The Stock Sage app allows users to filter and identify companies that have been buying back their stock for at least three or four of the last five years, showing a commitment to enhancing shareholder value.

What is the price of the Stock Sage app and what does it offer to its users?

The Stock Sage app is priced at $129 per year and offers a tool to easily find stocks that meet the criteria of positive earnings, low PE ratios, strong balance sheets, high profit margins, and stock buybacks.

What is the final recommendation in the video for investors looking for stocks that will increase in value over the years?

The final recommendation is to focus on stocks with positive and increasing earnings per share, a low PE ratio, a strong balance sheet, a high profit margin, and a history of stock buybacks, using tools like the Stock Sage app to identify such opportunities.

Outlines

00:00

📈 Stock Selection Criteria: Earnings and Growth

The speaker emphasizes the importance of selecting stocks from companies that have been profitable over the past five years, with a focus on consistent growth in earnings per share. They illustrate this with an example of a company that only turned profitable in 2023 after years of losses, underscoring the risk of investing in stocks without a track record of profitability. The speaker also introduces the 'Stock Sage' app, which filters stocks based on positive earnings and suggests looking for institutional investment as a sign of a fundamentally sound company.

05:01

🔍 Analyzing Earnings Growth and the Stock Sage App

The paragraph discusses the use of the Stock Sage app to identify companies with positive earnings growth over the last five years. It highlights the desire for increasing earnings per share, not just consistent earnings, and warns against companies that have seen a decrease in earnings. The app is praised for its ability to filter stocks that are at their annual low price and have a history of positive earnings, offering a tool for investors to find potentially lucrative stocks.

10:02

📊 Earnings Per Share and Stock Price Trends

This section delves into the analysis of earnings per share and its correlation with stock price increases. The speaker uses the example of a company with a history of increasing earnings per share and significant stock price growth in the last three years. They also mention the use of financial estimates from Yahoo Finance to predict future stock movements, comparing these estimates with historical data to gauge potential returns on investment.

15:07

💡 Utilizing PE Ratios and Stock Valuation

The speaker introduces the concept of Price-to-Earnings (PE) ratios to determine stock affordability and potential for growth. They demonstrate how to use historical PE ratios to estimate a stock's low price and discuss the importance of buying stocks when they are at a low PE ratio. The paragraph also touches on the use of the Stock Sage app to find stocks with favorable PE ratios and positive earnings.

20:07

🏦 Balance Sheet Analysis: Current and Total Assets vs. Liabilities

The focus shifts to the importance of a strong balance sheet, with the speaker explaining how to assess a company's financial health by comparing current and total assets to current and total liabilities. They use the Stock Sage app to filter stocks based on this criterion and discuss the implications of a company having more assets than liabilities, indicating financial stability and potential for growth.

25:08

📊 Profit Margin as an Indicator of Financial Performance

The paragraph discusses the significance of profit margin as a measure of a company's profitability. The speaker sets a benchmark of over 20% profit margin as an indicator of a financially successful company and uses the Stock Sage app to filter stocks based on this criterion. They provide examples of companies with varying profit margins and highlight the desirability of stocks from companies that can maintain high profit margins.

30:09

🔄 Stock Buybacks and Company Growth

The final point in the speaker's analysis is the practice of stock buybacks, which can be a sign of a company's confidence in its own value. They differentiate between companies that issue more shares and those that buy back shares, using the Stock Sage app to identify companies that have been consistently buying back shares. The speaker argues that such companies are more likely to see an increase in stock value over time.

35:10

👋 Conclusion and Future Engagement

In conclusion, the speaker summarizes the five key criteria for selecting stocks with potential for long-term growth: positive and increasing earnings per share, a low PE ratio, a strong balance sheet with assets exceeding liabilities, a high profit margin, and a history of stock buybacks. They express anticipation for the next video, inviting viewers to join them for further discussions on stock investment strategies.

Keywords

💡Stock Increase

The term 'Stock Increase' refers to the growth in the value of a company's stock over time. In the context of the video, it is central to the theme as the speaker discusses the significant increase in stock prices in the years 2021, 2022, and 2023, highlighting the importance of selecting stocks that are likely to grow in value. The script mentions specific percentages of increase, such as '148% increase in the stock, price that was, 2021,' to illustrate the potential for profit.

💡Fundamentally Sound Company

A 'Fundamentally Sound Company' is one that has strong financial health and positive business prospects. The video emphasizes the importance of investing in companies that are not just profitable but also have a track record of making money consistently. The script uses the example of a company that only turned positive in 2023 after years of losses to caution against investing in such stocks.

💡Earnings Per Share (EPS)

Earnings Per Share (EPS) is a measure of a company's profitability on a per-share basis. The video script discusses the significance of EPS in evaluating a company's financial performance, stating that investors should look for companies with positive EPS for the last five years and a growing EPS over time. The speaker uses the financial data of a company to demonstrate how to check EPS from 2019 to 2023.

💡Net Income

Net Income represents the profit a company makes after deducting all its expenses from its total revenue. The script explains that investors should check a company's net income to ensure it has been making money over the years. The example given shows a company that only started making a profit in 2023 after years of losses, indicating the importance of this metric in stock selection.

💡Institutional Investors

Institutional Investors are organizations such as banks, insurance companies, and pension funds that invest large sums of money in the stock market. In the video, the speaker mentions these investors as being educated and likely to buy stocks when a company is fundamentally sound and priced well, suggesting that individual investors should consider following their lead.

💡52-Week Low

The '52-Week Low' is the lowest price a stock has traded at over the past year. The video script discusses using the 52-week low as a starting point to identify stocks that have fallen to their annual low price, which could potentially be a good buying opportunity if other fundamental factors are favorable.

💡Stock Sage App

The 'Stock Sage App' is a tool mentioned in the video that helps investors identify stocks with positive earnings for a certain number of years and other favorable financial characteristics. The app is used as an example to illustrate how technology can assist in filtering stocks based on specific criteria such as earnings growth and PE ratio.

💡Price-to-Earnings Ratio (PE Ratio)

The Price-to-Earnings Ratio (PE Ratio) is a valuation ratio calculated by dividing the market value per share by the earnings per share. The video emphasizes the importance of a low PE ratio in determining whether a stock is affordable or undervalued. The script suggests comparing the current PE ratio with historical lows to estimate potential growth.

💡Profit Margin

Profit Margin indicates how much profit a company makes for every dollar of sales. The video script advises investors to look for companies with a profit margin greater than 10%, and ideally greater than 20%, as an indicator of operational efficiency and profitability. The app mentioned can filter stocks based on this criterion.

💡Stock Buybacks

Stock Buybacks occur when a company repurchases its own shares from the market, which can increase the value of remaining shares. The video discusses the significance of stock buybacks as a positive signal of a company's financial health and confidence in its future prospects. The script notes that investors should prefer companies that are buying back shares rather than issuing more.

💡Balance Sheet

A Balance Sheet is a financial statement that presents a company's assets, liabilities, and shareholders' equity at a specific point in time. The video script highlights the importance of a strong balance sheet with current assets exceeding current liabilities and total assets exceeding total liabilities as a sign of financial stability and a good investment.

Highlights

The importance of choosing stocks from companies that are actually profitable, as many stocks on the market do not make money.

Introduction of the 'Stock Sage' app, which identifies stocks at their 52-week low with positive earnings for the last 3 to 5 years.

The significance of a company's earnings per share (EPS) being positive and increasing over the last five years.

The strategy of buying stocks when the price is at a low PE ratio, indicating potential for growth.

Analyzing a company's income statement to ensure consistent growth in earnings and not just profitability.

The use of PE ratios to estimate where a stock's low price might be and to determine if it's at an affordable price.

The necessity of a strong balance sheet with current assets exceeding current liabilities for financial stability.

The advantage of looking for companies with total assets greater than total liabilities for long-term growth potential.

The role of profit margin on the income statement, with a preference for companies exceeding a 20% profit margin.

Filtering stocks in the 'Stock Sage' app based on profit margin to find companies that are efficient at turning revenue into profit.

The concept of stock buybacks as an indicator of a company's confidence in its own stock and potential for value increase.

The differentiation between companies that buy back their shares and those that continually issue more shares.

The practical use of the 'Stock Sage' app to identify companies that have been consistently buying back their shares.

The five key factors to consider when investing in stocks for long-term growth: positive and increasing EPS, low PE ratio, strong balance sheet, high profit margin, and stock buybacks.

The benefit of using the 'Stock Sage' app to streamline the process of finding fundamentally sound stocks for investment.

The presenter's personal recommendation and endorsement of the 'Stock Sage' app as a valuable tool for stock selection.

Transcripts

148% increase in the stock

price that was

2021

38% in

2022 and

167% in

2023 hey guys in this video I'm going to

show you the five things that you look

for when you're picking a stock that's a

fun Fally sound stock that you want to

grow in value over

time and I'm going to start with the

first

one and that one is that the company

because we know stocks are just shares

of a company is that the company

actually makes money a lot of stocks on

the stock market actually don't make

money and there's a lot of people I

speak to who own stocks and I ask them

what they own and they tell me and when

they show me the stock would tell me the

stock they own I look up the ticket

symbol pull up the stock and show them

that this company's lost money for the

last five

years

so I'm going to go

to the 52 we low these are the stocks

that have fallen into their their annual

low

price and we see a bunch of them down

here a dollar $9

$2 I'm going to go to the first one with

a decent amount of

money let's

see well let's look at black line ticker

symbol

is BL

doesn't come

up oh it does fill up

okay let's go to the income

statement and when you go to the

bottom let's look at that let's look at

two

things first the earnings per share 2019

negative 2020 negative 2021

negative 2022

negative only in

2023 was it positive so now I'll go to

net

income

and in

2019 this company lost

32,5 35,000

in 2020 they lost

46,9

11,000 in

2021 they lost 11

15,1

161,000 in 2022 they lost 29

m391

th000 only in

2023 did they make money they made 52

m833

th000

so there are a few things that you check

for when you're buying

stock because stock is basically shares

of a

company and what makes those shares go

up the shares go up when more people are

buying than

selling and you have a lot of smart

investors out there they're called

institutional investors they invest for

organizations and Banks and so

forth and they are very educated

investors and when the company is

fundamentally

sound and at a good price that's when

they buy and you want to be buying with

them so this is is one of the things you

look for if it's a company that's losing

money every year you don't want to buy

it but if it's a company that's making

money every year you want to buy

it so I'm going to show you a way that

you can make sure that you're getting

companies or

stocks that are making money every

year and not not only that there are

other things to check for as well I'm

going to show you those as

well so this is the stock Sage

app and what the stock Sage app does

every day that the market is

open is it checks the 52 Week

low and it pulls up all of the companies

that have positive earnings for three or

more years from The Last 5

Years so if we look at these

companies or if we look at this

list 1

9183

42945 all positive earnings we're not

seeing any negative earnings

I'm not seeing any so far but at the

most I should see two years here's one

this one has one year's negative

earnings and that was 2020 Co lockdown

year so this app pulls up all

companies with positive earnings for the

last five

years but we want more than that

the second thing that we

want is we want companies where it's not

just positive

earnings like this one has five years a

do 686 a114 A1

4656 that's fine they made money every

year the only problem is I don't want

them to just make money every year I

want the amount of money that they're

making

to be increasing every

year I

want so I want those earnings per share

maybe they can fall back one year but at

least four of the five years I want

their money to be

increasing like this one looks good 92

cents and 29 a13 in 2020 A1 69 in 2021 1

a172 in

2022 but in

2023 they fell all the way back to 26

Cents again let's see what they're doing

right now in

20124 so I'm going to click on the

ticker

symbol go into the

app and the current earnings per share

is negative

so I don't want that

company

so we just looked at the first thing

that you're looking for when looking or

looking at when looking for

stock you want a company that

has positive earnings per

share for the last five

years and you want those earnings share

growing at least four to five

years now this app stock Sage actually

does that for

you the app is only

$129 for a year and it actually pulls up

all of the

stocks on at their annual low price that

have positive earnings for anywhere from

3 to five over the last 5 years this app

does that for you but there are other

things that you want to look for when

buying a stock as well and we're going

to go through those as

well one is going to be well let's jump

to

the most important one

I'm going to explain what those are for

in a

second but let's choose

paycom notice in the top of the

app it has the earnings per share for

the

last five years as well as this year

$3.14

in 2019

$249 in 2022

$3.39 in

2020 or

2021

$486 in

2022

$591 in

2023 and right now it's

2024 what's the current earnings per

share

$819 so this earnings per Shar is

increasing every

year but the app also shows you the high

and low stock prices for the years

$114 in

2019 and the high was

$277

45 that was an increase of

143

37% then low price $1

16195 and high price 4

16686 in

2020 that was an increase of

18827

per. low price

$299.95 high price

$553

197 in

2021 that was an increase of

8482 per. low price $253

53 and high price

$42.39 in

2022 that was an increase of

62.6% and in

2023 low price

$145.2 high price

$371

19 that was an increase of

1556

6% in

2023 and we can even go to

a site like Yahoo go to Yahoo

finance and go

to

pcom and they'll give us an estimate of

where they feel

the stock is going to move up to this

year

$190.

31 so we type that in

here and it will actually tell

us what the estimate

is for how high they feel this stock

will move

up in 202

before the current year which is 30.7

to% now bear in

mind Yahoo when they

estimate where they feel a stock will

move up to I feel that they're giving

you a very conservative

estimate because the lowest that this

stock has moved up to in the last five

years has been

62% but their estimate only gives you a

30%

but in any event you get all of this

information from the app but the most

important thing notice that if we look

at the low prices this stock was

$114 in

2019 161 in 2020 299 in

2021 253 in

2022 and

145 in 2023

you can't know where a

stock is going to fall to as far as its

low

price by just looking at the price it

can pretty much fall

anywhere however what you can do is

estimate where a stock is going to fall

to by looking at the low PE

ratio and you have the low and high PE

ratios here

here so the low p ratio in 2019 it was

39 36 2020 it was

65 2021 it was 8

888 so this one the PE

ratios are further spread

apart I'm going to go

back and choose a different stock

where the P ratios may be closer

together let's look at MGP

Ingredients and if we look at MGP

Ingredients their low pees

were 17 8 10

14

16 right so I can look at this stock and

I can say

okay if the PE

Ratio is around

10 I'm definitely going to buy it cuz it

may be at its low

price if it's around

12 I may consider

it if it's around maybe 14 even 16

because we see in 2023 the lowest p

ratio was

16.93 in 2019 the lowest p ratio was

17.67% the PE

ratios give you a much better

sense of where that stock is going to

fall as far as the low p ratio and then

start to move back up if the P

ratios been to

8.84 in 2020 and that was the lowest and

let's say you saw the p ratio was around

eight right now could it fall further

yes

absolutely but we're looking for

probabilities and is the probability

that it's going to fall much further no

it hasn't fallen further in The Last 5

Years so the probability is that if it's

around 8 it's moving back up and the

probabilities is that right now if it's

at 16

.89 which is lower than it's been in

23 as well as

2019 it may move back up from here you

have to watch it you can't be sure but

it may move back up from here it may not

go any lower this year so the second

thing that you want to do is check with

the current p ratio is and where these

low PE ratios are for the Last 5 Years

so that you can see if this stock is at

an affordable price on the other

hand if I'm looking at the stock right

now and it's at a PE ratio of let's say

35 that's

higher than high PE ratio for this

stock in

2023

2022 2009 um

2021

2020 the only year was higher was 2019

where it went to

42.9 so if you buy this stock with a p

ratio of 35 what's it more likely to

do it's more likely to move down for the

rest of the year than it is to move up

for the rest of the year you want to get

it when it's moving up not when it's

moving

down so that's two things you want to

look for when getting a

stock you want positive earnings per

share that's moving

up and you want to get it when it's at

that low PE ratio

now let's look

for or I should say let's look

at the third thing that we want to look

for actually I'm going to come back I'm

going to make this the fifth I'm going

to make this the third current assets

and

liabilities now the way that this stock

Sage app works

is that it automatically only pulls up

stocks whose total

assets are more than their total

liabilities but current

assets is not automatically higher than

current

liabilities that's actually an option in

here so if you click on current assets

to current liability

now it Narrows the list down to only

stocks that have current

assets that are higher than current

liabilities and what does that mean well

once again I'm going to go in the app

choose a different

company you know what I'm going to

choose a better

company give me a second

yeah let's go back to MGP Ingredients

now if we look to the debt to equity for

this

company we like a debt Equity that's

under

200% but this one is they're all under

100 2019

39.63 2020

39.63

2021

61.65 2022 55

33 and 2023

63.88

but now we're going to look at the

balance

sheets and on the balance sheet you have

two

things you have the current numbers and

the total numbers so first let's look at

the current

numbers first we have current current

assets everything let's go up so you

could see the

Years first we have current

assets that's everything the company

owns and current

liabilities everything the company

owes current is in I'd say a year or

less everything that they own which is

like shortterm a year or less everything

they owe which is shortterm a year or

less notice

2019 current assets 1884 M26

th000 current liabilities

39,2

195,000 so when we subtract the current

liabilities from the current

assets there's

a lot left over which basically

means if this company was to run into

trouble like the companies did during

2020 Co lockdown years a lot of

companies couldn't open they couldn't

conduct their business but do they have

enough balance enough money on their

balance sheet to be able to continue to

function and operate without having to

close

down a company that doesn't have that

they may have had to close

down

well if we look at

mgp's um balance sheet they were

fine same thing with 2020

2021 2022

2023 all of these years their current

assets very far exceeded their current

liabilities on their balance sheet now

what about total assets and total

liabilities well in

2019 total assets were

322,000 and what was their total

liabilities 91 mil 553,000

so

their total assets far exceeded their

total

liabilities when you subtracted one from

the other you still had 231 million

44,000 we see the same kind of

story with 2020 21 22

23 so that's the second second thing you

w to well I'm sorry that's the third

thing that you want to check for when

you're picking a fundamentally sound

stock that's going to grow in value we

said number one positive

earnings for at least three four five is

ideal of the last five years we want

those earnings to be growing every year

that was number one number two we wanted

to be a low PE ratio and low PE ratios

is

relative in other words a low PE ratio

for one company may be nine a low p

ratio for another company may be

23 it depends on what that company's low

PE ratio looks like for the last five

years

the third thing is we want total assets

greater than total liabilities and

current assets greater than current

liabilities now what's the fourth thing

we're looking

for a fourth thing we're looking for and

all of these things once again you find

in the stock Sage app of which I am

going to put the the um the URL or the

website for that app in the description

it's only

$129 a year the fourth thing you're

looking for is on the income

statement you want the profit

margin to

be well greater than 10% is decent I

want even

better I want greater than 20% so I'm

gonna

turn all these filters

off and let's look at how long this list

is of all the stocks that fell to the 52

we low that have positive

earnings pretty long list right now

let's turn on the current

assets greater than current liabilities

notice the list is still

long but it gets a little shorter

now greater than 10% on the income

statement in terms of the profit

margin our long list has just been

narrowed down to

six now let's

say profit margin greater than

20% and when we change it to profit

margin greater than 20%

now our list has moved down to two now

let's look at the earnings per share 5

cents 10 cents 26 Cents 37 cents 49

cents it's moving up each year let's try

this one pure cycle Corporation 20 cents

28 cents 84 cents then a drop 40 cents

20 cents I'm going to go with DLo let's

see what the carent earns but sure

is and the current earnings per share

for

DLo is 44 cents but remember we're still

in June so the year isn't even over

yet

now we only have 3 years is for this

company but

notice 148% increase in the stock

price that was

2021

38% in

2022 and

167% in

2023 I'm going

to scroll down a little bit

want to go to the income

statement and here we're looking at the

income

statement profit

margin

31.9% in

2021

25.93% in

2022 and 22.

91% in

2023 so

I would say that's the fourth thing

you're looking for you want a company

that's actually earning

money doing what they do for a living

and

20% may not seem like much to you but

for a company 20% is very good you have

a lot of companies out here who earn a

lot of money during the year

I shouldn't say earn they make a lot of

money during the year in terms of sales

and revenue but after they pay all of

their

expenses the amount of money that they

keep in actual

profit may be

2% it may be

5% if they make 10% in profit they're

doing good if they make 20% in profit

they're doing pretty

well

so like I

said let's turn off these

filters and click a few companies so I

can improve my

point darling ingredients good company

let's go to their income

statement 9% 8% 133%

11%

9% and these are solid companies let's

go to otx open tax

Corporation 9% 7% 9% 11% 3%

let's go to Robert

Half 7% 5% 9% 9%

6% so when you can find a company that's

making over

20% you're doing pretty well but with

this app that's

simple all you have to do

is click on greater than

20% and it pulls them right up for you

and those are four

things we spoke

about the positive earnings for those

five years we spoke

about looking at the p ratio to make

sure you're buying it at a good price

we spoke about a strong balance sheet

and we spoke about a company that has a

decent profit margin greater than 10% or

greater than 20% Which this app helps

you to find very easily lastly we're

going to talk about a company that does

stock

BuyBacks and let me explain what a stock

buyback is

a

company

actually can make

money in any of three

ways the first way is the way that we

like our companies to make

money that is by doing whatever they do

for a

living

right

now what does that mean that means if

they sell shoes you you want them to

make their money by selling shoes if

they sell TVs you want them to make

their money by selling

TVs what are the other two ways a

company can make

money the other way a company can make

money is they can just borrow

it and there's nothing wrong with

borrowing so that they could build to

make more

money but when you borrow you have to

pay

back and you have to pay back with

interest so you want your companies to

be careful of borrowing you want them to

keep their debts

down and the third way that they can

make

money is by selling more shares of their

stock they can actually use the stock of

their company like an

ATM they need more money so what are

they they do they just keep selling more

shares and selling more shares that's

what you don't want them to do as a

matter of fact you want them to do the

opposite you want to see them buying

back their

stock and with this app you can see that

you can see which

companies are buying back shares of

their stock either for the last five

years or barring one year would mean

they bought back shares of their stock

for at least three

years or they bought back shares of

their

stock I'm sorry they bought back shares

in stock for at least four of the last

five years or they bought back shares in

stock for at least three of The Last 5

Years so we see D local limited bought

back for at least three of The Last Five

Years let's make this list longer I'm

going to say greater than

10% and there we

go let's check out pom

again

now just because the company bought back

of their

stock doesn't mean that's the only thing

they

did they may have sold more shares as

well so you want to check that you want

to see

that they didn't sell more shares than

they bought

back in the case of

paycom for all five years it's z0000 z z

so paccom didn't sell more shares of

this stock in those five

years but in

2019 they bought back

42,5 128,000

worth in 2020 they bought back 52 mil

40,000 worth in

2021 they bought back

65,500 worth

in

2022 they bought back

94,6 52,000

worth and in

2023 they bought back

286 Million

618,000

worth

so those

are the five things that you want to

check for guys when buying a stock a

stock that's going to be increasing in

value over the years and putting money

in your pocket we're not so concerned

about it being a big name that everybody

knows we're concerned about it being a

stock that's increasing in value over

the years and putting money in our

pocket and those five things are one

positive and increasing

earnings per share every year of those

last five years

to a

relatively low PE ratio so that we know

the stock is about to move up from that

point

three we want a strong balance sheet

current assets greater than current

liabilities total assets greater than

total

liabilities we want a decent profit

margin on the income statement greater

than 10% or greater than

20% and we want a stock that's not

continually selling more a company

that's not continually selling more

shares of stock but actually buying back

shares of their stock and with all of

these things that

process the process can be a bit tasking

it can be hard to find but all of it is

right here in the stock Sage app for

simple

$129 a month you can find the um Link in

the description in any event guys you

have a great night and I look forward to

speaking to you in the next video