UCO Bank Q1 net profit up at Rs 133.4 cr

UCO Bank has announced its first quarter results. The company's Q1 standalone net profit was up at Rs 133.4 crore versus Rs 132.9 crore.

Its standalone NII was down at Rs 408.4 crore versus Rs 415.7 crore.

Shipping Corp Q1 net profit up at Rs 279.6 cr

Shipping Corporation of India has announced its first quarter results. The company's Q1 standalone net sales were at Rs 1,061.9 crore versus Rs 885.9 crore.

Its standalone net profit was up at Rs 279.6 crore versus Rs 206.1 crore.

Indian ADRs: MTNL gains 6.9%, Dr Reddy's Lab up 1.8%

US markets pull off modest gains on better than expected economic reports and crude cools further to 123 dollars. Better than expected reports of durables, new home sales and consumer sentiment eased concerns of economic slowdown.

The Dow closed up 21 points at 11,370 while the Nasdaq ended 30 points up at 2,310. S&P 500 ended higher by 5.22 points at 1257.76.

For the third consecutive week, crude falling 1.8% to 123.30 dollars per barrel.

EQUITY

Stock Market Fundamentals

What are the basics of financial instruments?
Let us understand the two fundamental types of investments, namely bonds and stocks with an example. Eg. Imagine you want to start your own grocery store. You will need a capital amount to get started. You acquire the requisite funds from a friend and write down a receipt of this loan ' I owe you Rs 1, 00,000 and will repay you the principal loan amount plus 5% interest'. Your friend has just bought a bond (IOU) by lending money to your company.

Thus a bond is a means of investing money by lending money to others. When you invest in bonds, the bond you buy will show the amount of money being borrowed (face value), the interest rate (coupon rate or yield) that the borrower has to pay, the interest payments (coupon payments), and the deadline for paying the money back (maturity dates).

There are several Pro's and Con's to investing in bonds
Pro's
Ø Bonds give higher interest rates compared to short-term investments.
Ø Bonds are less risky when compared to stocks.

Con's
Ø Selling bonds before they're due, may result in a loss, known as a discount.
Ø If the issuer of the bond declares bankruptcy, you may lose your money. Hence you must critically evaluate the credibility of the issuer of the bond, ensuring that he has the capability to repay the bond amount.

Now, let us continue with the same example. To accrue more capital for your new grocery store, you sell half your company to your brother for Rs 50,000. You put this transaction in writing 'my new company will issue 100 shares of stock. My brother will buy 50 shares for Rs 50,000.' Thus, your brother has just bought 50% of the shares of stock of your company.

Thus, to explain stocks:
Stocks, also known as Equities, are shares in a company. It is the certificate of ownership of a corporation. In simple terms, when you invest in a company's stock or buy its shares, you own part of a company. Thus, as a stockholder, you share a portion of the profit the company may make, as well as a portion of the loss a company may take. As the company keeps doing better, your stocks will increase in value and yield higher dividends.
Dividend: A sum of money, determined by a company's directors, paid to shareholders of a corporation out of its earnings.

How to Identify the Best Stocks to Invest In

Everyone, who are investing in stocks; are crazy about how to indentify the best stocks to invest in? They are trying every trick to ensure greater profit and reduce the loss. But even then there are people who are getting bankrupt and there are some who are making fortunes at the stock exchange. Why is that? There is no magic in this and stock investment is not about luck. To identify the best stocks to invest, you need to have information and you also need to know how to analyze that information and of course how to use them. Only then you can make profitable investments at the stock market. Here we have discussed a few factors that are instrumental in judging the potential of the company and its stock.

Sales Revenue - Sales revenue is a crucial parameter to judge the financial health of a company. Sales revenue is the amount of money that a company makes in a financial year. Sales revenue also includes some portion of the cost and loss as well.

Earnings - Earnings of the company or the net income of the company shows if the business is making profit or loss. It shows the present financial condition of the company as well as helps to predict the future of the company as well. If a company is posting profit year after year, it is quite obvious that the company has a good future ahead.

Debt - Debt is the financial liability to any company. If a company is running with debt, then major share of its earnings will go to pay up the debts and obviously, the net profit will decrease. So it is always better to invest in stocks that have lower debt level.

Liquidity - Liquidity of a company reveals the cash holding position of the company. It is quite natural that a company with better liquidity is more likely to expand its business and grow in the near future. So it is important to look at the liquidity of the company as well.

Valuation: Valuation is the worth of the company. Most widely used and easiest way to find out about the valuation is the P/E Ratio. According to the experts, it is always better to invest in stocks that have a P/E ratio between 5 and 50.

These are just some of the points that you need to consider for choosing the best stocks to invest in. There are so many other factors that also need to be considered for better stock picks, such as the overall market trend, direction of the market, the prevailing trend in the sector in which you are likely to invest and so on.