There are many stocks to buy, but finding those stocks which represent good long term investments can be tricky. The key tip is to not follow the hot tip and instead do research of your own, and make sure you understand and manage the risks associated with investing.
You can start with a narrow list of stocks that meet certain qualification that can be narrowed down by using a stock screen. Such an example of a screen would be:
Net Margin >15%
PEG Ratio <2
P/E (F1) <10 5 Yr. Hist. EPS Growth >10%
Long-Term Growth Consensus Est. >10%
Companies with higher net margins tend to have a clear advantage that gives them higher margins, such as brand recognition and customer loyalty. Such companies have a high chance of doing well in the future, and companies that grow should eventually have the stock price reflect the improvement in the companies worth.
Companies with low P/Es (under 10) as well represent companies that are already selling for good value at the moment. Finally companies that have a history of growth and a consensus estimate of growth over the next 5 years have shown the ability to expand and look to do so in the future. With that being said, here are the results which may be a good starting point in identifying good stocks to invest in for 2011.
| ACE LIMITED | ACE |
| ASM INTL NV | ASMI |
| AXIS CAP HLDGS | AXS |
| CHINA NATRL GAS | CHNG |
| CNINSURE IN-ADR | CISG |
| COPA HLDGS SA-A | CPA |
| ENDO PHARMACEUT | ENDP |
| ITT EDUCATIONAL | ESI |
| HI TECH PHARMA | HITK |
| HARBIN ELEC INC | HRBN |
| JA SOLAR HOLDGS | JASO |
| KULICKE & SOFFA | KLIC |
| MICROSOFT CORP | MSFT |
| NELNET INC CL-A | NNI |
| TERADYNE INC | TER |
| TEVA PHARM ADR | TEVA |
| TRINA SOLAR LTD | TSL |
From this list, or other similar list finding good stocks, you should be able to look into the balance sheets, the 10-k reports, the quarterly reports, and so on to investigate further as to whether or not any of these represent a good investment for you personally.