Accumulation VS Distribution Phase
How to know if the stock of a company is in 'Accumulation Phase' or Distribution Phase'? This is a very common question every investor asks before an investment in value stocks. Sometimes what we see is stock, take the move and go sideways so it becomes difficult for an investor to identify whether this sideways phase is for accumulation or distribution and how we should understand this ? Here is the simple trick with the help of which you can easily identify the stock phase. There are three major players (Smart Money) which play an important role in shareholding of any company. a) Promoter. b) Mutual fund or Insurance companies. c) FIIs (Foreign Institutional Investors) So let us understand how we will identify smartly which company is good for investment. Step 1: Find a good fundamental company.( Smartly) a. Sales must be increasing. b. EPS should be increasing. c. Low debt. d. P/E should be less than industry. eg. KEC intnl. Step 2: Look for past 6 months' share