Identifying undervalued stocks can be tricky, especially for new investors without comprehensive knowledge of stock analysis.
And an even trickier process is when a company’s stock is considered to be undervalued compared to its peers, despite being constantly profitable and have long-term prospects.
This could be due to several factors: interest rates, inflation, broad market weakness – which can trigger a price overreaction, causing a fall in the share price of a high-quality stock.
So, how can you find a potential goldmine of a stock and be that patient investor, seeing it flourish to its truest potential?
Interactive Brokers has released a unique tool called IBKR GlobalAnalyst, which is intended to help investors interested in international portfolio diversification, to discover undervalued companies that may have greater growth potential.
Using GlobalAnalyst, investors can search for stocks by region, country, industry, market capitalisation, currency and other various metrics to identify undervalued stocks worldwide.
“In addition to offering investment choices from more than 150 global markets, we continue to provide investors with leading technology and tools to help them make informed investment decisions,” Thomas Peterffy, Chairman and Founder of Interactive Brokers said. “GlobalAnalyst is a great tool for individual investors and sophisticated traders to begin their search, looking to take advantage of the benefits of investing globally.
“We emphasise that thorough analysis must always follow initial findings.”
One nifty feature is the P/E/G Ratio (Price to Earnings divided by three-year compound earnings growth rate).
The PEG ratio, by definition, will be equal to 1 when the growth rate of earnings is equal to the PE ratio. As the growth rate of earnings increases above the PE ratio, the PEG ratio becomes smaller, and as growth goes lower, PEG becomes higher. Sell the stocks above a PEG of 1+ and buy the ones below 1-, could be a valid strategy.
Similarly, users may buy and sell and follow these stocks in the currency of their choice, all in one account on one screen from a single unified platform.
