I am sure you’ve heard of a company called Nintendo (OTC: NTDOY).
It’s the Japanese video game company behind famed video game franchises like Super Mario, The Legend of Zelda and Donkey Kong. Those video games were all the rage back in the late ’80s and ’90s, and they remain massively popular today.
I still remember how hard it was to avoid those bananas in Mario Kart.
But what happened later on in the 2000s and 2010s was shocking. Nintendo, the once amazing video game company, was in trouble.
Through 2014, the company lost about $750 million. The stock was collapsing, down almost $80 to just $13.
But then something happened – a reversal.
Nintendo swung from that $750 million loss back to a profit of more than $1 billion over the following three quarters.
So if you timed it perfectly and bought it at $13, you could’ve made 515% in profit over the following six years. Talk about a comeback!
But why did this happen? And how can you learn this BEFORE a stock like Nintendo explodes so you can profit as well?
This is a process I’ve spent my life mastering.
And after years of trial and error, I found my groove during the Great Recession of 2007 to 2009.
I’m really excited to bring this to you because I really believe 2022 is…
The year of the value stock.
Think about it…
The markets are as volatile as ever.
Inflation is rampant. Everything is overpriced. Almost zero stocks are worth the value they’re currently trading at.
So what does it mean for you as an investor?
The sad truth is…
Companies with strong fundamentals are going to crash in these markets too.
However, those same companies are going to recover FASTER than other companies. That’s because these companies are truly good investments – not just trades.
So when you, the investor, can identify the difference between a good investment and a simple trade, you can make life-changing profits.
This is why I’ve compiled a checklist for you here.
Six Critical Factors for Identifying Value Stocks
These are the top six factors I look for when identifying a value stock.
Now, these items aren’t the only things you should look for, but they’re a great place to start.
Keep this cheat sheet in your pocket or on your smartphone. That way, whenever you see a company you might want to invest in, you can use this fundamentals checklist to make sure your research is sound.
Here are the top six things I look for when identifying a value stock:
- Market leader: This is pretty straightforward. Ask yourself whether the company in question is selling a particular type of product at a higher volume than its competitors.
- Several streams of income: Does this company have other ways of generating revenue beyond its initial product offering? What other products/services does it offer?
- Big backlogs (if manufacturing): Does it have a lot of future orders that have not been filled? The forecast of future service/parts ordered will be an accurate forecast for orders in the year ahead.
- Strong cash-generating capability: Does the company consistently produce cash flows from its ongoing operations?
- Established operations: Does the company have sound systems in place so it runs like a well-oiled machine?
- Large institutional ownership: The company should have a substantial amount of stock owned by large entities that manage funds on the behalf of others.
That’s it. Those are the ways you identify a value stock. Now for the exciting part…
Today’s Last Great Value Stock
There’s a company out there that checks all the boxes above. And I’m excited to tell you more about it.
This company’s income including equity sales swung from a $4.3 billion loss in 2020 back to a profit of nearly $3.5 billion in 2021.
City analysts estimate that annual earnings will rocket more than 320% in 2022. It may end up being closer to 500% (similar to Nintendo).
It also has a sales backlog of nearly $75 billion.
And based on its current price, it might be the single best value buy in the history of markets.
— Karim Rahemtulla
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Source: Wealthy Retirement