ONGC Stock Analysis – How Can You Successfully Analyze Stocks?

Playing the stock market isn’t a commonplace skill, so most people tend to rely on investment advisors to handle their stock purchases. However, it isn’t always necessary to hire an investment advisor or a financial advisor if you want to venture into the stock market.

If you’re really interested in your financial prospects or your future retirement plans, you can learn stock analysis in a way that suits your personal requirements. After all, even professional investors depend on stock analysis to find potentially profitable stocks. 

For instance, with the current pandemic ruining economic opportunities around the world, many investors with oil and gas stocks are worried. They are looking at daily ONGC stock analysis reports to find out how the market is reacting to the fiscal situation at hand.

In a country like India, ONGC stock news definitely makes financial headlines, for ONGC is the country’s largest oil exploration and production company and accounts for nearly 90% of India’s proven oil and gas reserves. 

At their current rate of production, ONGC accounts for over 80% of oil and gas production. That’s because they are also responsible for the production of value-added petroleum products such as LPG, kerosene, naphtha, and diesel.

However, with the rise and drop of share prices in the last few months due to the economic slowdown brought about by COVID-19, trading ONGC stocks has become every investor’s means of rescue. By the end of April, the ONGC share forecast was at 69.15. For all investors who were considering to buy stocks at the time were advised to find the answer to one simple question: will this price run survive the pandemic?

However, ONGC stock analysts suggest some pretty good reasons to think the share value of ONGC will continue to perform well in the year ahead. In terms of trading recommendations, Oil And Natural Gas had:

• 15 Buy recommendations
• 4 Hold recommendations
• 0 Sell recommendations

Such stats clearly suggest that analysts are generally positive about the outlook. However, these stats can sometimes prove to be unreliable, so it’s always advisable to get a better idea about the strengths and weaknesses of ONGC stocks and doing some investigation yourself.

But how do you analyze something as complicated as stocks on your own, with no financial background whatsoever? Well, we’re here to help you with that. Here we have a few simple steps that you could follow in your quest to unlock the world of financial dividends and stocks.

Industry Analysis

Every industry has publicly available information about its financial status, such as a company’s annual report. An annual report can provide an excellent overview of the industry, along with its future growth outlook. It also tells us about the major and minor competitors in a particular industry. Having a subscription to good trade magazines and websites that cater to a particular industry for monitoring the latest industry happenings can also prove beneficial.

Business Model Analysis

Try to focus on a company’s strengths and weaknesses, as there can be a strong company in a weak industry or vice versa. Look for a company’s strengths in its unique brand identity, products, customers, and suppliers. You can gain better insight into the company’s business model from its annual report, trade magazines, and financial websites.

Management Quality

Management quality is considered to be a critical factor when overtaking an ONGC stock analysis, or any kind of stock analysis for that matter. You might have even heard of the popular saying, “There are no good or bad companies, but only good or bad managers.” Management executives are hugely responsible for the company’s future, so you can analyze company management and board quality by doing your own due diligence on the internet.

Financial Strength

Irrespective of whether you like it or not, understanding the financial strength of a company is of the utmost importance when it comes to stock analysis. If you do not get a certain amount of knowledge of the financial aspects, it can devastatingly affect your analytical decisions. Try to make deductions out of a company’s balance sheet, income statement, and cash flow statements. More often than not, it is these numbers in the financial statements that speak louder than the glossy words of an annual report. You have to realize that running away from numbers is not going to do you any good, so it’s better to learn and get comfortable with them before putting your ‘stocks’ in a basket.

Growth Analysis

Understand that stock prices, whether they are share value of ONGC or otherwise, follow earnings. Therefore, a successful analyst needs to know where future earnings are heading in order to correctly predict whether a stock price would be moving up or down in the future. Unluckily, there isn’t a quick formula to tell you what to expect for future earnings. To do your own stock analysis, you need to make your own estimates by analyzing previous sales growth numbers and profit margins, along with profitability trends in the specific industry. The ultimate exam of your stock analysis capabilities is making accurate enough earnings forecasts because it’s an indication of your grasp of those industries and companies.

Bottom Line

There is no correct way to analyze stocks, something that all financial experts unanimously agree on. The main point of stock analysis is to find companies that you believe are good and great long-term businesses to invest in. Having a clear goal will definitely go a long way in helping you find stocks that are likely to deliver strong returns over time.

You need to understand that the ultimate goal of every investor is to make a profit. However, not every person who becomes an investor is perfect in their analysis of the dynamic stock market. Therefore, do not blindly accept the words of stock analysts and make sure to do your own research. While everyone cannot be an investing expert, you can always improve your analytical skills when it comes to stocks.