Generating Stock Ideas

How to Select & filter stocks to perform Due diligence!!

General Observation - Observe what people are buying and selling, see what products are being consumed, keep an eye on the neighborhood to see what people are talking about.
Stock Screener - This is basically a filter for specific ratios you consider. Google Finances & Screener.in
Macro Trends - Keeping a general tab on the macroeconomic trend is a great way of identifying good stocks. Select the macro trend and then look for the company with most competency to leverage the trend.
Sectoral Trend - One needs to track sectors to identify emerging trends and companies within the sector that can benefit from it. Ex - emergence of energy drinks in non-alcoholic beverages.
Special Situations - Positive changes in the management of specific news triggers about a company which has positive sentiment towards the market.
Circle of Competence - Look for the best company in your field of profession since you have expertise.

The Moat

The term simply refers to the company’s competitive advantage (over its competitors).
A company which possesses wider moat characteristics (such as better brand name, pricing power, and better market share) would be more sustainable, and it would be difficult for the company’s rivals to eat away its market share.
Moat Examples -

Due diligence is 3 part -
- Understanding the business - Read annual reports
- Apply the checklist
- Valuations - Estimate Intrinsic value

Here's are some questions one needs to ask to gain clarity on the business in consideration.

These questions are for you to start of with while accessing a companies position.