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Tim's Fundamental View LayoutHere is the way that I view any stock for an initial analysis to get an idea of what the market is valuing and viewing the company. I first look at the free cash flow, so that is directly under the price chart. Free cash flow is the life-blood of the company and can be used to pay dividends and to reinvest in the company to grow the top line or to buy back stock. Next I look at the PSR or Price-To-Sales-Ratio. This ratio is paramount for me since the top line shows up first for companies and is the starting point for analysis. Companies with low or no sales growth get priced very differently from companies with high growth. Start with sales growth in your analysis. There are many great books on the topic written by Kenneth L. Fisher, the creator of the tool. Next "Avg Basic Shares Outstanding" to see if the company is constantly diluting investors and raising capital or hiding expenses by giving out stock options each year. Old companies in slow growth industries tend to buy back stock and growth companies grow shares outstanding and is a strong headwind for investors. Next is "Long Term Debt"... which is another extremely important variable to look at with any company. In the long run, debt is the cheapest capital since you can pay it off cheaply but it can also drag down a company when the future is uncertain and unpredictable. Companies with predictable sales and growth often load up on debt which enhances returns for equity owners, but increases the risk long term. Jet Blue NASDAQ:JBLU is case in point for this as in 2000 before the pandemic it had a $5 billion market cap with $1 billion in debt and now it has over $8 billion in debt and the market cap is down to $1.5 billion. It is very difficult to get out from under such a heavy debt load. Debt can be "death" for any company if overused. Next is "Revenue" graphed annually. Essential to see if inflation impacts sales growth or if it can't keep up with inflation. The last 5 years was between 20%-50% inflation depending on the industry so if a company doesn't have higher revenues by at least 20% since 2019, then this reveals a weakness in their pricing power which is a very competitive market with likely declining or low margins. Last is "Market Cap". It is always good to know the market capitalization of any stock that you own. It is the foundation for understanding if any investor would ever want to buy the whole company and what would it cost to buy it and what are the "returns" from owning the whole company. I hope you can copy this layout for your own so you too can have a one-page view of the history of a company to help you get your mind around its valuation and potential along with understanding the risks all in one, easy picture.
NASDAQ:RIVNEducation
by timwest
12
9 Simple Ratios Every Great Investor Uses - Buffett Included!Forget the hype, headlines, or hope. These 9 financial ratios are what real investors actually use to pick winners, but... P/E? ROE? EPS? 🧐 - What are they, or better yet, WHO are they? 🤯 - How high is “too high”? - Is a low number always good, or just a trap? - Do all industries follow the same rules… or is that another myth? Buffett. Greenblatt. Graham. Lynch. They didn’t rely on vibes — they trusted fundamentals After years of relying on charts, I built a 9-point fundamentals checklist to filter stocks faster and smarter. Now I’m sharing it with real-life examples and key insights to help you spot what really makes a stock worth owning: Easy enough for new investors diving into fundamentals Sharp enough to level up seasoned pros Real enough to avoid hype …but the truth is: these numbers did flag companies like Amazon, Apple, and Nvidia before the market gave them credit. ----------------------------------------------------- ✅ Quick Reference Table Scan the table, then dive into the stories… First Pro Tip: Bookmark this. You’ll check these before every stock pick. ----------------------------------------------------- 📊 1. P/E Ratio | Price-to-Earnings What it tells you: How much you pay for each dollar of a company’s profit. Short Example: A P/E of 20 means you pay $20 for $1 of profit. High P/E? Expect big growth or risk overpaying. Strong: Between 15 and 25 Caution: Above 30 (unless fast growth) Industry Averages: - Tech: 25–40 - Utilities: 10–15 - Consumer Staples: 15–20 - Energy: 10–20 - Healthcare: 20–30 Story: In early 2023, NVIDIA’s P/E ratio hovered around 25, near the low end for tech stocks. Investors who saw this as a steal amid the AI boom were rewarded—NVIDIA’s stock made 4x by the end of 2024 as AI chip demand soared. Contrast that with Tesla in Q1 2025, when its P/E spiked above 40 with slowing sales and Tesla’s stock dropped 50% in weeks. Pro tip: A low P/E is not always good. If growth is weak or falling, it's often a trap. Example: A utility company with a P/E of 30 is probably overpriced. A tech stock with 35 might still be fair — if growth justifies it. ----------------------------------------------------- 🧠 2. PEG Ratio | Price-to-Earnings-to-Growth What it tells you: If a high P/E is worth it based on future profit growth. Whether the earnings growth justifies the price. Short Example: A PEG below 1 means you’re getting growth at a fair price. High PEG? You’re overpaying. Strong: Below 1 Caution: Above 2 Industry Averages: - Software: below 1.5 is solid - Consumer Goods: Below 2 is more realistic - Tech: Below 1 - Consumer Staples: Below 1.5 - Healthcare: Below 1.2 - Financials: Below 1.5 - Energy: Below 1.3 Story: In mid-2022, Salesforce’s PEG was 0.8 (P/E 35, forward EPS growth 45%) as cloud demand surged. Investors who spotted this steal saw the stock climb 130% by the end of 2024. Meanwhile, Peloton in 2023 had a P/E of 20 but near-zero growth (PEG above 3). Its stock cratered -50% as fitness trends faded. Story: NVIDIA’s PEG hit 0.9 in Q3 2023 (P/E 30, growth 35%) during AI hype, a steal for tech (average PEG below 1.2). PEG filters hype. A stock can look expensive until you factor in growth. ----------------------------------------------------- 🧱 3. P/B Ratio | Price-to-Book What it tells you: How much you pay compared to what the company owns (like buildings or cash). Short Example: A P/B below 1.5 means you’re paying close to the company’s asset value. High P/B? Expect strong profits or risk. Strong: Below 1.5 Caution: Below 1 + poor earnings = value trap Industry Averages: - Banks: Below 1.5 - Insurance: Below 1.3 - REITs: Use NAV (aim below 1.2) - Tech: Often ignored - Energy: Below 2 Story: In 2024, JPMorgan Chase’s P/B was 1.4, solid for banks (average below 1.5). Investors who bought enjoyed 100% gains. n 2023, Bed Bath & Beyond’s P/B fell below 1 with collapsing earnings. It looked cheap but filed for bankruptcy that year. Tip: Only use this in asset-heavy sectors like banking or real estate. ----------------------------------------------------- ⚙️ 4. ROE | Return on Equity What it tells you: How well a company turns investor money into profits. Short Example: An ROE above 15% means the company makes good money from your investment. Low ROE? Weak returns. Strong: Above 15% Caution: Below 10% unless in slow-growth industries Industry Averages: - Tech: 20–30% - Consumer Staples: 15–25% - Utilities: 8–12% - Financials: 10–15% - Healthcare: 15–20% Story: Coca-Cola (KO) has kept ROE above 35% for years, a sign of brand power and pricing strength. Eli Lilly’s (LLY) ROE stayed above 25% from 2022–2024, a healthcare leader (average 15–20%). Its weight-loss drug Mounjaro drove consistent profits, lifting the stock 150%+ in two years. Checking ROE trends helped investors spot this winner. Tip: If ROE is high but D/E is also high, be careful, it might just be leverage. ----------------------------------------------------- 💰 5. Net Margin | Profitability What it tells you: How much profit a company keeps from its sales or what % of revenue ends up as pure profit. Short Example: A 10% margin means $10 profit per $100 in sales. Low margin? Tough business or high costs. Strong: Above 10-15%+ Caution: Below 5% Industry Averages: - Software: 20–30% - Retail: 2–5% - Manufacturing: 8–12% - Consumer Staples: 10–15% - Energy: 5–10% - Healthcare: 8–15% Story: Walmart’s (WMT) 2% net margin looks tiny — but it’s expected in retail. A software firm with 5%? That’s a warning — high costs or weak pricing. In 2023, Zoom’s (ZM) net margin fell to 5% (down from 25% in 2021), well below software’s 20–30% average. Pricing pressure and competition crushed its stock quite a lot. Meanwhile, Apple’s 25% margin in 2024 (tech average 20%) remained a cash cow. Tip: Margins show whether the company owns its pricing or competes on price. ----------------------------------------------------- 💣 6. D/E Ratio | Debt-to-Equity What it tells you: How much debt a company uses compared to investor money. Short Example: A D/E below 1 means more investor cash than debt. High D/E? Risky if profits dip. Strong: Below 1 Caution: Above 2 (except REITs or utilities) Industry Averages: - Tech: 0–0.5 - Industrials: 0.5–1.5 - REITs: 1.5–2.5 (manageable due to structure) - Utilities: 1–2 - Energy: 0.5–1.5 Story: In 2024, Tesla’s D/E dropped below 0.3 (tech average 0–0.5) as it paid down debt, signaling strength despite sales dips - a massive rally afterward. Tip: Rising debt + falling profits = a storm coming. Always check both. ----------------------------------------------------- 💵 7. Free Cash Flow (FCF) What it tells you: Cash left after paying for operations and growth investments. Short Example: Apple’s $100 billion cash pile in 2024 funded stock buybacks, boosting shares. Low cash? Trouble looms. Strong: Positive and growing Caution: Negative for multiple years Sector notes: - Tech: Lots of cash (think billions) - Industrials: Up and down, check trends - REITs: Look at FFO (cash from properties), aim high - Energy: Has cash, but swings with oil prices - Healthcare: Steady cash, not too high Story: Netflix had negative FCF while scaling content. Once costs stabilized, FCF turned positive and stock re-rated sharply. Pro tip: Profits don’t mean much without real cash. FCF is often more honest. Cash is king: Companies need cash to pay bills, reduce debt, or fund growth. If FCF is falling, they might be burning through cash reserves or borrowing, which isn’t sustainable. Potential issues : This mismatch could signal problems like poor cash collection, heavy spending, or even accounting tricks to inflate profits. ----------------------------------------------------- 🚀 8. EPS Growth | Earnings Power What it tells you: How fast a company’s profits per share are growing. Short Example: EPS up 10% yearly means more profit per share, lifting stock prices. Flat EPS? No growth, no gains. Strong: Above 10% Caution: Below 5%, flat/negative for 3+ years Industry Averages: - Tech: 15–30% - Staples: 5–10% - REITs: 3–6% (via FFO growth) - Healthcare: 10–15% - Financials: 5–10% - Energy: 5–15% (cyclical) Story: In Q1 2024, NVIDIA’s forward EPS growth of 30% (tech average 20%+) fueled a rally as AI chips dominated. Checking forward estimates helped investors avoid traps like Intel, with flat EPS and a drop. Pro tip: A stock with flat EPS and no dividend? There’s no reason to own it. ----------------------------------------------------- 💵 9. Dividend Yield | Passive Income What it tells you: How much cash you get yearly from dividends per dollar invested. Short Example: A 3% yield means $3 per $100 invested. High yield? Check if it’s sustainable. Good: ~3–4% Red Flag: Above 6% with a payout ratio above 80-90% Industry Averages: - Utilities: 3–5% - REITs: 3–6% - Consumer Staples: 2–4% - Tech: 0–2% - Energy: 2–5% ----------------------------------------------------- 💡 Final Thought: How to Use All of This Top investors don’t use just one metric. They look at the whole picture: Good growth? Check PEG. Good profits? Confirm with ROE and margin. Safe balance sheet? Look at D/E and cash flow. Fair valuation? P/E + FCF Yield + P/B. Real power = Combining metrics. A company with P/E 15, PEG 0.8, ROE 20%, low debt, and positive FCF? That’s your winner. A stock with P/E 8, but no growth, high debt, and negative cash flow? That’s a trap. ----------------------------------------------------- Real-World Combos 🎯Winners: Tech Gem: P/E 20, PEG 0.8, ROE 25%, D/E 0.4, growing FCF, EPS 20%+ (e.g., NVIDIA 2023: AI-driven growth, stock soared). Energy Steal: P/E 15, P/B 1.5, FCF positive, Dividend Yield 3.5% (e.g., Chevron 2023: Cash flow king). ⚠️Traps: Value Trap: P/E 8, flat EPS, D/E 2.5, negative FCF (e.g., Peloton 2023). Overhyped Tech: P/E 50, PEG 3, Net Margin 5%, D/E 1.5 (e.g., Rivian 2024). ----------------------------------------------------- 🚀 Share your own combos! What do you personally look for when picking a stock? If you spotted something off in the numbers, or have a valuable insight to add — please, drop it in the comments.👇 💡 Let’s turn this into a thread that’s not just good but superb and genuinely helpful for everyone. ----------------------------------------------------- Final Thought “Buy great companies at fair prices, not fair companies at great prices.” – Warren Buffett This guide gives you the map. Charts, tell you when. These numbers tell you what, and why. And this post? It’s just the beginning! These 9 metrics are part one of a bigger series I’m building — where we’ll go even deeper, with more advanced ratios, smarter combos, and real case studies. If this guide helped you see financial numbers a little clearer, there’s a good chance it’ll help your investor friend too, especially if they’re just starting their journey...🤝Share it with them! I built this as much for myself as for anyone else who wants to get better.👊 If you made it this far — thank you! 🙏 ...and super thankful if you hit "The Boost" on this post 🚀 Cheers, Vaido
NASDAQ:TSLAEducation
by VaidoVeek
2
RTLR - A Spinoff w/ Room to GrowFoundation of revenue from long-term fixed contracts provided by the parent company (FANG). Utilizing FCF to fund five JV's; three of which are paid for and already generating cash. The other two require an additional $79m in Capex before completion. Additionally utilizing FCF for an 'aggressive' share buyback program. This should result in 2021 results showing decreased CAPEX, and higher cash-flow as joint ventures are completed and optimized. With a 7.79% dividend and a nice ascending triangle, RTLR seems primed for a move up in the short-term, along with a promising foundation for the medium to long-term. The Fibonacci extensions provide some insight into potential short term targets once weekly candles begin to close outside of the blue triangle. This post is purely for education purposes. I am not a financial advisor, and as such, this post should not be interpreted as financial advice.
RLong
by Halams
1
Northop Grumman a buy near trend line supportDefense contractor Northop Grumman fell hard toward trend line support both before and after its earnings report last Friday, despite a solid beat of analyst expectations. The fall has occurred as analysts adjusted forward estimates of earnings and sales downward for the next two years. Despite the downward revisions, Northop Grumman remains a growth company, with PEG ratio of 1.8. The share price has fallen much faster than earnings expectations, making NOC a very attractive buy as it approaches support. Let's look at NOC's current price ratios compared to its three-year median price ratios on earnings dates. Here is the implied upside from the current price ratio to the median price ratios on earnings dates over the last three years: P/E: 21% Fwd P/E: 18% P/S: 17% Fwd P/S: 21% P/D: 17% Fwd P/D: 23% P/B: 31% P/FCF: 81% Sentiment on NOC is positive, with an 8.3/10 analyst summary score (average rating Buy). The news environment for the company is good, thanks to several US government contracts recently signed, and several others recently successfully completed. Open interest on NOC is about evenly split between bulls and bears, but the 30-day average of trading volume favors the bulls. NOC is nearing support from July lows and a seven-month trend line. I will look to make a buy around 287.
NYSE:NOCLong
by ChristopherCarrollSmith
7
HPE sentiment is changingLast week I put up a post titled "HPE sentiment may change for the better," but the post got blocked because I had a link in there that the mods felt constituted advertising. Well, HPE sentiment has begun to change for the better, as I predicted, so I think this is worth an update and repost with the offending link removed. I track metrics of both value and sentiment, and I usually only buy a stock if measures of both value and sentiment are aligned. I've noticed, though, that there's more money to be made if you can pick a stock with good value and poor sentiment that's about to improve. HPE may be a candidate for just such a positive change in sentiment. Value I've struggled with how to calculate PEG ratios post-Covid. I generally take my earnings growth rate from an approximately five-year linear regression line (three years past actuals, two years future estimates). But when you've got a black swan event right in the middle of your time series, what do you do with that? Do you use a continuous function that makes the growth rate look negative? Or do you use a piecewise function that makes it look positive? I've settled on taking the average of the two. So, keep that in mind when I tell you that I've calculated HPE's PEG ratio at 3.39 and PSG ratio at 0.36. I typically multiply the two values together to get a composite PEG*PSG ratio, in this case 1.23. Of the stocks I track, the only one with a better PEG*PSG than this is $HPQ. HPE is also trading near the bottom of its 3-year valuation range in terms of forward P/E and forward P/S. It has generally traded at about .75 forward P/S. Right now it's about .47. Implicitly, there's about 59% upside from here. Do the same calculation with forward P/E, and the numbers imply about 40% upside from here. Another thing I really like about HPE is how innovative it is. Over the last three years, HPE has averaged 50 patents granted per billion dollars of current market cap, making it more innovative for its size than any other company I watch save IBM. Throw in the fact that HPE is expected to pay 4.8% in dividends over the next 12 months, and you've got a stock that combines both shareholder returns and growth potential. That's rare. Sentiment HPE's Equity Starmine Summary Score improved from 1.6/10 to 3.7/10 in the last 24 hours, meaning that analysts are growing more positive on the stock. The upgrade caused a nice spike in the stock price today. The sentiment change comes after HPE reported 3Q results and not only beat analyst expectations on earnings and revenue, but also beat analyst expectations on 4Q guidance. Analysts sharply increased earnings estimates for the next couple years after the earnings report. Perhaps even more importantly, HPE dramatically improved its financial health from the year-ago quarter. From the conference call: "Our Q3 free cash flow of $924 million was up $276 million year over year, driven by a record cash flow from operations as a result of our improved execution this quarter. . . . We generated cash flow from operations of approximately $1.5 billion. This is the highest level for the past 11 quarters, as we improved our operational execution." The company does expect cash flow to be sequentially lower next quarter due to restructuring, but the company is still in stellar shape financially, with an $8.5 billion cash reserve. Given HPE's strong results, I expect continued analyst upgrades. And I'm not alone in thinking so; HPE now has a bullish put/call ratio of 0.51. Technicals HPE's technicals are neutral at the moment, with the stock in a triangle. A couple ways to play it would be to buy near the bottom of the triangle or wait for an upside breakout. I do think there's a good chance HPE will make an upside breakout in the coming weeks, overall market conditions permitting.
NYSE:HPELong
by ChristopherCarrollSmith
4