☕ How to Pick Good Stocks — Even if You're a Total Beginner

 ☕ How to Pick Good Stocks — Even if You're a Total Beginner

These days, everyone seems to be investing in the stock market, right? But many people still wonder: How do I even know which stocks are good?

No worries — let's break it down into simple, fun steps. Here's your go-to guide for picking quality stocks, even if you're just starting out!

👩‍🏫 1. Is the company making money?

Ultimately, stock investing is about asking: "Is this company actually making good money?"

• EPS (Earnings Per Share): If this number keeps rising, the company's getting better at making profits.
• Revenue, Operating Income, Net Profit: If all three are trending up year after year — that's a green flag. 📈

💰 2. Is the stock reasonably priced?

Think of buying stocks like shopping. Just like you want deals at the store, you want to buy stocks when they're not overpriced.

• PER (Price-to-Earnings Ratio): Shows how expensive the stock is compared to its earnings. Lower = better value.
• PBR (Price-to-Book Ratio): Compares the stock price to the company's assets. Below 1? That's like getting a $100 bill for $80! 💰

📈 3. Is the company growing well?

A growing business often means a growing stock price.

• Sales Growth Rate: If revenue keeps increasing, more investors will notice.
• EPS Growth Rate: A consistently rising EPS means the company is both productive and profitable.

💡 4. Is the company financially stable?

Making money is great, but surviving tough times is equally important.

• Debt Ratio: Lower is better. Below 100% is usually safe — though this isn't always easy to achieve.
• Current Ratio: Shows whether the company has enough short-term assets to pay off short-term liabilities. More liquidity = better financial cushion.

🎁 5. Does it pay dividends?

Not every stock does this, but dividends are like bonus cash while you wait.

• Dividend Yield: A range of 3–5% is considered quite good!
• Payout Ratio: Tells you how much of the company's earnings go to dividends.

🌟 Let's Try an Example: Palantir (PLTR)

So what happens when we apply these rules to a real stock?

Let's take a look at Palantir Technologies (PLTR) — really popular right now thanks to AI and defense contracts.

• EPS & Revenue Growth: They've turned a profit in recent quarters and revenue keeps rising. → ✔️ Making Money
• PER: It's still considered high, but that's normal for fast-growing companies. → 🤔 A Bit Pricey
• Debt: Almost zero debt. Very solid finances. → ✔️ Financially Healthy
• Dividends: Nope, not yet — but they're reinvesting in growth. → 🔄 Growth-Oriented
• Industry Trends: AI, defense, and government contracts — all future-proof industries. → ✔️ Future Potential

📌 In summary: PLTR may be a bit pricey now, but it's a strong long-term growth stock. Great for investors looking at future gains!

☑️ Remember These 4 Key Questions:

1. Is it consistently making money? (EPS, Revenue, Net Profit)
2. Is the stock price reasonable? (PER, PBR)
3. Is the company stable and healthy? (Debt & Current Ratios)
4. Does it pay good dividends? (Yield & Payout Ratio)

Here's the reality — very few companies check every single box. But if a stock meets at least 3 of these criteria, it's likely a good one!

Good luck, and happy investing! 🚀📊