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Want to be a better investor?

Today’s alert will help, regardless of your skill level.

I’m showing you how to pick stocks using only the free version of Yahoo! Finance.

I’ll use Nvidia as my example, but you can use this method with any stock.

Step #1: Type in the company name or ticker into the “Quote Lookup” search bar on the right side of the Yahoo! Finance homepage. 

The “Summary” tab will appear.

Here’s a screenshot of NVDA’s “Summary” tab at the time I’m writing this:

On this page I’m looking at three things:

• The stock chart over various time horizons. I prefer high-quality stocks that consistently move up and to the right.

• The Market Cap. This tells you the size of the company. As you can see, Nvidia is a $3.617 trillion company.

• The last thing I’m looking at is the P/E ratio. You can think of this like cost-per-ounce labels on packaged goods at grocery stores. The higher the ratio, the more expensive the stock.

Step #2: Click on the “Financials” tab on the left side of the page.

The income statement will populate first.

I’m looking for consistent revenue and earnings growth here.

As you can see below, Nvidia has grown revenue consistently from just $16.7 billion in 2021 to $113 billion in the last twelve months (TTM).

Earnings have also grown from $4.3 billion in 2021 to $63 billion in the last twelve months (TTM).

This is insane growth. Hence why the stock has been a rocket ship over the last few years.

Step #3: Click on the “Analysis” tab on the left side of the page.

This tab provides a simplified view of expert predictions and expectations about a company's future performance.

Here’s a few screenshots of NVDA’s “Analysis” tab at the time I’m writing this:

This Earnings Estimate section shows expert estimates of earnings over various time periods.

I prefer the “Avg. Estimate” line, which is $4.36 per share next year for Nvidia, compared to just $2.93 this year. Again, insane growth.

This EPS Trend section shows how expert opinions of the stock are changing.

You can see that over the last 90 days, Nvidia’s average earnings estimates for next year have increased from $3.83 per share to $4.36 in just the last 90 days.

Current year earnings estimates have also increased from $2.75 per share to $2.93 in just the last 90 days.

This is what you want to see in high-quality stocks – consistently increasing earnings projections.

Step #4: Combine the information to make a logical assessment.

Nvidia’s current price is $147 and the stock trades at a 58x P/E ratio.

If the stock price doesn’t move and the company achieves the average earnings estimates for next year – which is $4.36 according to the “Analysis” tab – the stock will trade at a 33x P/E ratio in one year.

Note: $147 divided by $4.36 equals a 33x “forward” P/E ratio.

As you can gather from my previous articles this week, NVDA doesn’t ever trade at 33x.

Buyers consistently step in whenever the most powerful, profitable, and important AI company touches a 50x P/E ratio – let alone 33x.

To put how cheap a 33x P/E ratio is into perspective, here’s a list of a few companies currently trading at 33x and their growth rates:

In short, these companies aren’t even in the same ballpark as Nvidia.

That’s why I expect NVDA’s stock price to reflect this by rising in the near future.

You can do this with other stocks, too.

This entire analysis was done for free at Yahoo! Finance – not too much financial knowledge necessary.

Send me an email with any questions at AskDavis@paradigmpressgroup.com, and stay tuned to The Million Mission as I look to trade NVDA to $1 million.