Gaining maximum returns is the primary goal of every investor who opens an online demat account. And blue chip stocks have been helping investors to reach their short-term and long-term goals easily. Some of the blue chip stocks in India are Tata Consultancy Services (TCS), Oil and Natural Gas Corporation (ONGC), Coal India, Sun Pharma, etc. It is said that Oliver Gingold of Dow Jones coined the term “Blue Chip” in 1923.
What are blue chip stocks?
Expert investors and finance managers create a list of stocks that have the potential to perform extremely well in the stock markets. These stocks are known as blue chip stocks. When you open an online demat account, your online brokerage firm will help you with updates on the blue chip stocks as investment tips.
To understand better, watch this video by ehowfinance on blue chip stocks: https://www.youtube.com/watch?v=bf2IzvWTq_4
Identify the blue chip stocks
You can use the methods used by expert investors to identify the listed companies that can qualify as blue chip stocks. Here are some ways to identify the blue chip stocks for online demat account holders:
Find listed companies that are huge in size. Look for company reports with a good sales turnover and notable EBITDA with consistent performance over the years. These kind of companies can be a good investment for online demat account holders in the long-term.
· Reputed Firm
A known company with great reputation has high chances of growing faster than the other companies. An established company also has most of the capabilities and resources to support their growth initiatives. This competitive advantage in turn leads to higher prospects of a very good EBITDA in the future.
Another advantage of a reputed company is the recognised leadership team. The management team of listed companies who are proven leaders in scaling the company to great heights can be an indication that the company is in able hands. They can lead the company to better sales figures and better earnings for shareholders too.
· Shareholder’s Equity
An online demat account holder earns by selling shares for profits and through dividends. Companies part of blue chip stocks pay attention to the earnings of their shareholders. You can review the financial reports for investors on the company websites or other sources to track the Earnings Per Share (EPS) of the listed companies. EPS will help an online demat account holder to identify the companies with good EPS figures indicating the profitability of shareholders.
· Company Reports
Study the performance of a company, check for favourable ratio figures such as debt-to-equity ratio, return on equity (RoE), price-to-earnings ratio etc. The comparison of these ratios using company data for a long period will give an idea of how the company has grown, and whether it has the power to be a blue chip stock. Online demat account holders can also benefit from the valuable insights obtained from the financial data analysis of a company by experts.
Invest in blue chip stocks with an online demat account. Learn about the Top gainers and losers in the stock market, visit https://www.tradebulls.in/equity/top-gainers-and-losers.aspx
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