VALUE INVESTING – HOW TO FIND VALUE STOCKS & How to Do Fundamental Analysis for Beginners

Warren Buffett used value investing to become a billionaire. If you want to join the millionaire club, then you need to learn how to value invest like Warren Buffett. This is Investing 101 – the quick and easy guide on how to find value stocks for beginners and how to do fundamental analysis for beginners.

Hi guys it’s stock curry and two weeks ago i showed you how warren buffett used a strategy called value investing to generate a 20 to 60 percent annualized return in today’s video i’m going to show you how you can use some free stock screeners to find the types of value stocks that warren buffett invested in and then i’m going to show you how you can do some very

Basic fundamental analysis in order to ensure that those value stocks are good stocks to invest in for the long term then in about two weeks we’re gonna be starting our value stock investing portfolio called the millionaire club challenge the reason we’re calling it the millionaire club challenge is because we are gonna turn two thousand dollars into a million

Dollars over the next 10 to 15 years by investing in value stocks and depositing a small weekly amount of 100 per week or 200 every other week to it’s 200 per paycheck and continuing to do that for the next 10 to 15 years in last week’s video i showed you how the math works out you can go watch the warren buffett video to see how all of that’s going to work in

Today’s video i’m going to show you how to actually find these stocks so that we can get started investing now the reason we’re still going to wait two more weeks to start the investing challenge portfolio is because earnings season is still in full swing and i do want to give as many companies as possible the chance to report earnings before we actually start

The challenge that way we will have a latest set of earnings data and we will be able to make the most informed decisions possible about what stocks to actually invest in so let’s get started with how we can use some free screeners to find these value stocks now for this challenge we’re going to be using moomoo of course you can use whatever broker you want in

This video i’m going to show you how to find these value stocks in moomoo weeble and then also using a free stock screener called finviz that everybody has access to so starting with moomoo if you are on the phone app the first thing you want to do is you want to go to markets and then you want to go to stock screener from there you’re going to click create new

Strategy now if you’re using moomoo’s desktop app then you’re going to start with the explore tab and you’re going to then click on screener from here we’re going to set our filters we’re going to do the industry as nasdaq that’s going to eliminate a lot of the penny stocks you could also just uncheck the otc box but for this demonstration we’re just going to do

Nasdaq listed securities then under market cap we’re going to do custom and when you select custom we’re going to do 0.3 billion to 2 billion now what this is going to do is it’s going to limit the number of stocks down to those with a market cap of between 300 million and 2 billion or what is generally considered small cap stocks you can’t of course use any

Amount that seems right to you but for this challenge we’re going to be focusing on the small caps once you have that set the last thing to do is just go down to the p e ratio and select zero to five this is going to filter it down to only those companies with low p e ratios of five or less in other words your value stocks now once you have those filters set what

I recommend doing is scrolling to the right and finding a column called p e and then drag that column to the left so that it’s right next to the p e t t m now in mumu p e t t m is the current p e ratio while p e is the forward p e ratio based upon forward expectations of profits p e t t m is the value that we are going to be using for the value stock portfolio so

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The last thing to do is to click on this so that it is sorted by pe ttm from smallest to highest now if you’re not using moomoo for this challenge then the next best screener is a free stock screener called finviz that’s f i n v i z dot com you go to and then you click on screener and it’s going to take you to this tab the next step is to set up the

Same limitations that we had in moomoo and to do that we want to select nasdaq for the exchange and then for the market cap select small that’s going to be your small caps those between 300 million and 2 billion now finviz also has an additional screener that we could use where we can actually filter down by country also so for example if you wanted to limit this

To only u.s stocks you could do that or you could just multi-select and do only u.s or canadian however you want to do it the country filter is another option that you have on finviz that you don’t have in mumu now on finviz the pe and forward pe are already side by side and on finviz the pe is the ttm pe or the current p e ratio that you saw in moomoo so what we

Want to do is click on this in order to sort it from smallest to highest now the stocks that show up on the finvis screener are going to be a little bit different from the stocks that show up on the moomoo screener and the reason for that just has to do with different ways in which market cap is calculated a little bit different ways and how often these sites

Update as far as determining what the p e ratio and things like that but for the purpose of this video i just want you to know that it does not matter which screener you use they will both find value stocks for you now i also want to point out that there’s going to be a lot of similarities so just in the top 7 or 8 here we can see that lx astl and can are all found

On finvis and on mumu we can see that those same three stocks are also found in the top ten including lx can and astl now that we have our stock screener limited down to some potential stocks that we could invest in the next thing we need to do is go to the company financials and determine if this company is profitable if they are consistently profitable or if

Perhaps they’re wild and all over the place and might turn negative at some point in the future as these are going to be long-term investments we do want to find stocks that have a consistency of profitability then we also want to go look at the balance sheet and make sure this company has plenty of cash on hand and that we’re not accidentally buying some zombie

Stock that might go out of business in the future we want to make sure that they’re profitable making money and have more than enough cash on hand to cover all of their liabilities and debts that they might have to deal with at some point in the future so let me show you how to go look up those company financials on both weeble and moomoo so first of all if you are

On the moomoo phone app you’re going to pull up the details for a stock then you’re going to swipe to the left and then you’re going to click on financials and then statements and then detail now if you’re on moomoo’s desktop app once you pull up the stock that you want to investigate you’re going to click on analysis then financial and then under the financial

Statement you’re going to click on income statements once you’re on the income statement you want to select quarterly so that we can see what’s been happening over the past year then scroll down to the very bottom and you want to look at diluted earnings per share there are two things that we want to look for here first of all we want to make sure that the company

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Is profitable for each of the past four quarters so we want to make sure that all four of these numbers in white is a positive number and not negative then what we want to do is we want to make sure that these earnings are in fact increasing so we want to look at the green percentage numbers and make sure that the company is seeing an increase in earnings year

Over year that means the company’s growing and not dying and so long as the company continues to grow then it should rise from this undervalued state and get back up to fair value so that we can actually make money on this stock once you’re sure that the company is consistently profitable and growing then you want to click on balance sheets from balance sheet

You want to scroll back up to the top and you want to look at current assets and receivables add those two numbers together so in this case it’s 2.64 billion and a thousand the thousand is negligible so we’ll just go with the 2.64 billion then you want to scroll down about halfway and you want to look at current liabilities and you want to make sure that the

Short-term assets are larger than the current liabilities in this case short-term assets were 2.64 billion and current liabilities are only 2.19 billion so the company is perfectly fine they’re going to be able to pay all of their liabilities and have plenty of cash left over with no problems now if you want to take this a little bit deeper you could look at total

Liabilities which also includes all of their long-term debt and this can be beneficial if a company has a lot of debt because the long-term debt is going to balloon or expire usually every five to seven years and you need to make sure the companies have enough cash on hand to cover those balloon payments so that they don’t go out of business when their debt expires

Now again in this particular case there is 2.64 billion dollars in cash and the total liabilities are 2.28 billion so this company actually has more than enough money to not only cover their short-term liabilities they also have enough money to cover their long-term liabilities so this is a company that would be good to invest in it’s a good value stock they’re

Making plenty of money they have plenty of cash on hand to cover all of their debt this is a good safe value stock to invest in now to find that same information on weibull once you have the stock pulled up you want to go to financials and then income statement and then quarterly scroll to the very bottom and look at diluted eps or earnings per share again make

Sure it’s profitable make sure it’s growing and make sure it has a green number for year over year growth then in weeble you would go to balance sheet scroll back up to the top and in this case you’re going to have to add the top four lines that’s cash and cash equivalents short-term investments short-term securities and accounts receivable add those four lines

Together and that will give you the amount of cash on hand then scroll down about halfway look at their total current liabilities make sure that the cash on hand is larger than their current liabilities alternatively you could also use the total liabilities number instead of the total current liabilities this would include the long-term debt as well and if you’re

Wondering why the dollar amounts are different between mumu and weibull on moomoo you can see here on this income statement that the currency is in cny versus on weibull the currency is in u.s dollars so the conversion rate has been done on weeble already and that’s it that’s how you find these stocks that’s how you look at the company financials to determine

If it’s a good company to invest in or not and that’s literally all there is to it now the one additional thing that warren buffett does say is he says invest in companies that you know and understand so the one additional step that we will be doing before we start the moomoo millionaire club challenge is we will be looking into the companies a little bit deeper

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And just trying to get a good understanding of what they do and see if we can understand their business model to determine if they are likely to continue to grow in the future then as we buy these companies with these extremely low p e ratios under five we hold them for an average of four years and they should get back up to fair value p e ratios of between 10 to

15 or 20 and at that point we will sell for a profit now the other question a lot of people have been asking me is what account can i use to actually do these investments of course in the united states you can use a roth ira to do all of this tax-free if you are in other countries such as the uk you could use an isa since all we’re doing is buying stocks here

If you have a lot of options on what type of account to open the other thing that i wanted to let you know about are the different brokers you could use in this video i’ve already shown you moomoo and weeble there are also others now if you do decide to go with moomoo that is available in the us australia or singapore here in the united states you will get up to

10 free stocks when you use my link to deposit at least a hundred dollars to take advantage of that offer go to stock moomoo that’s stock moomoo if you are in singapore you’ll get one free share of amazon when you open an account deposit at least two thousand seven hundred dollars to take advantage of that use stock moomoo sg that’s

Stock moomoosg and if you’re in australia will get ten dollars for every hundred dollars you deposit up to a fifty dollar bonus to take advantage of that offer go to stock mumu a u that’s stock moomoo now if you already have a moomoo account then i would recommend weeble and weibo is only available in the united states and a weeble

Right now if you open an account you will get up to 12 free stocks worth up to thirty thousand six hundred dollars it’s the best promotion they’ve ever had even if you do use moomoo for this account you might wanna go open a weeble account also just to get those free stocks i mean it’s incredible just like moomoo you do have to deposit at least a hundred dollars

To get those free stocks so you can use my link at stock weeble that’s stock weeble in order to take advantage of that offer and then finally if you are not in the united states or singapore or australia then i recommend interactive brokers interactive brokers has highly discounted trading throughout the world trade started just one canadian

Dollar four euros or six australian dollars depending upon where you live and of course all of these allow you to trade the full pre-market and after hours from four a.m till 8 pm so that you can buy and sell stocks before the market opens or after the market closes if you do choose to do that all right i hope you enjoyed the video and got a lot out of it don’t

Forget to watch the two prior videos setting up this challenge if you have not already and i will see you in two weeks with the stocks that we will be investing in again we will officially start this challenge in two weeks so go open your account get it funded and come back in two weeks to find out what stocks we’re gonna be adding to the millionaire club portfolio

Transcribed from video
VALUE INVESTING – HOW TO FIND VALUE STOCKS & How to Do Fundamental Analysis for Beginners By Stock Curry – We Profit Day and Night

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