4 simple basic analysis, can be used as a basis for investments, book value (corporate), price book value (PBV), earnings per share (EPS) and the price earning ratio (PER) benefits.

1. Book Value (BV)
Is defined as book value divided by the number of shares of the company’s net capital . Net capital is the company’s total assets minus total obligations. Therefore, from France BV, we can see that stocks with lower price or lower than other stocks expensive. In order to more clearly see this, then the following calculated using the PBV.

2. The price book value (PBV)
Price to book value is defined as (according to market segmentation books value stock) prices. Therefore, we can compare the same industry, stock prices, if the price is lower than the PBVthen we can say that the stock market price is rather low, but expensive. PBV not taken into account in front of him, the company’s performance, but at least if we see good performance in the PBV stocks are very cheap compared to other stocks in the same industry, the stock price may rise in the future, it is worth buying .

3. Earnings per share (EPS) of the
Is the enterprise’s net earnings per share compared to the number of shares returns. Therefore, the company’s assets, rather than income reference. This method can be used to predict stock price movements in addition can also predict the potential value (profit given that the shareholders of the company directly (no need to sell their shares)) by the investors.

4. The price earning ratio (PER)
The price earning ratio is defined as EPS divided by share price. The proportion company the ability to produce profits. The smaller the company’s stock price-earnings ratio would be better to buy, because it means that the company’s profits in the creation of better performance.

Now, if we already have such data, then followed by more from the same sector, several companies PBV, earnings per share and PER values. Then, we created a position for all three companies (best of any persons). Then, for each enterprise the same, PBV, earnings per share and PER value of the ranking, the average sum. With the smallest average rank is the most suitable company to buy stock (in this simple analysis is based).

Of course, this is the simplest analysis, but preliminary analysis of the needs of trading. Another fundamental analysis, very well teknikalnya analysis, but this basic knowledge of small investors, can do so stock a strong grip.