Q&A 161

Read this 🧵to understand ROE, PE & relationship between them.👇

PE expansion to bridge the Gap (if any) between ROE & PE.

RT if you find this helpful.

1

ROE is PE's brother from another mother / Half-brother (Sautela Bhai)

@Atulsingh_asan

2
ROE & PE definition continued..

Keep an eye on Equations !

3
Establishing Relationship between ROE (profitability) & PE (valuation).

Replace Market Capitalization with Book value in Earnings Yield (or PE) we get ROE.

4
Understanding ROE & PE deeper with Dupont Analysis.

5
DuPont analysis can help identify whether its Profitability, Use of Assets, or Debt that’s driving ROE or a combination of them.

ROE = NPM * Asset Turnover * Financial Leverage.

Impact of NPM of ROE & relationship with PE.

6
Impact of Asset Turnover & Financial Leverage (or Debt) on ROE & relationship with PE.

7
Impact of ->

1) Rising or Falling ROE on PE.

2) High Dividend Payout on ROE & growth.

3) High Retention Ratio (Retained Earnings).

8
Gap between ROE & PE. PE attempt to bridge the gap.

You may find the gap ->

📍When Market in Stress (like March to June 2020)
📍In Smaller Market Cap companies.

@Vivek_Investor

https://t.co/qDshtA6lMJ

9

More from Screening Stocks Enjoy 'My StressBusters'

More from Accounting

Building conviction on existing portfolio stocks is complex topic. I am still learning and have only 2-3 years exp. Lot of learning is inspired from @varinder_bansal as part of omkara family, listening to old colleage @connectgurmeet on news channel and @unseenvalue posts

https://t.co/KQkupOeFzp financial statements and results on quarterly basis to evaluate whether your thesis on company is still intact through growth in revenue, profits and cash. You cannot rely only on whats app forwards or brokerage updates.

2.Quarterly Con-Calls post result covering enviornment of the sector in which company operates, future expansion plans, & companies confidence in responding to fund managers. (For eg, in my evening walks, i listen to con-calls on You tube rather than music to utilize the time.)

3. High conviction is build when you compare py qtr or py year con call scripts and see whether company giving forward statements were met in subsequent quarters or not. For eg company said they will be doing CAPEX for 100 crores in FY 2020 and then we can see current state.

4. Profits not growing qtr or qt or yr on yr is not the sign for low conviction. You need to screen the balance sheet to see if the company has taken huge R&D expenditure which they believe is right for company as they build new products for future years, then that make sense

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12 TRADING SETUPS which experts are using.

These setups I found from the following 4 accounts:

1. @Pathik_Trader
2. @sourabhsiso19
3. @ITRADE191
4. @DillikiBiili

Share for the benefit of everyone.

Here are the setups from @Pathik_Trader Sir first.

1. Open Drive (Intraday Setup explained)


Bactesting results of Open Drive


2. Two Price Action setups to get good long side trade for intraday.

1. PDC Acts as Support
2. PDH Acts as


Example of PDC/PDH Setup given