What Makes A Stock The Best To Invest In?
How do you figure out the best stock to invest in right now? One approach is called growth investing, which seeks out companies growing at a faster pace than the market average. Another method is value investing, which locates stocks trading lower than their intrinsic value. Value investing ignores daily movements and short-term market trends and focuses on a company’s fundamentals for long-term growth.
Some of the performance metrics to be considered when assessing a company’s actual value are:
- Debt-to-Equity Ratio: This tells potential investors how much money the company has borrowed to finance its business compared to the total shareholder equity. Some industries require more debt financing than others, so a higher ratio might be acceptable in these cases.
- Price-to-Earnings Ratio: This ratio measures how ‘expensive’ a company’s shares are. It measures the company's current share price against its earnings per share. For example, if the stock trades at $24 per share and its earnings over a 12-month period were $3 per share, the ratio would be 24/3 = 8. Generally, a lower ratio is considered better for investors, although it’s optimum to compare P/E ratios between companies that are of a similar type. Bear in mind that it’s also important to look at a company’s future earnings potential rather than only considering its past earnings.
- Free Cash Flow: In determining the best stocks to invest in, FCF (Free Cash Flow) can be an indicator of a company’s earnings potential into the future. FCF is the amount of money earned by the company minus its expenses (operating expenses and capital expenditures). When this metric increases, it usually means that the company’s earnings are likely to rise. A strong FCF also tends to indicate better longevity for that business.
In summary, an investor should consider a stock’s market potential, financial health, leadership strength and competitive advantages. These economic indicators, industry trends, and company fundamentals all play a role in identifying stocks with high investment potential.
Best Stocks to Invest In Right Now
If you’re looking for the best stocks to invest in 2025, you can target both the local and global markets, as well as different sectors.
Looking at the ASX, some of the best stocks to invest in are blue-chip shares. Options to consider are:
- Coles Group Ltd: As one of Australia’s two largest supermarket chains, Coles has strengths such as the Flybuys loyalty program and its extensive network of Liquorland and Vintage Cellars stores. It has recently upgraded its online business and automation.
- CSL Limited: This biotherapeutics company places a strong emphasis on research and development (R&D), reinvesting about 12% of its sales into this area. It is currently rolling out its new plasma collection technology.
- BHP Group Limited: This perennial mining favourite has a high-quality portfolio of mines worldwide, and its share price is currently at an excellent entry point.
- Commonwealth Bank of Australia: In addition to being Australia’s largest bank, it is also the country’s largest mortgage lender. It delivers a consistently strong financial performance.
Stock Investment Tips For Long-Term Success
Any company can have short-term gains in the stock market because it can be such a volatile area on a day-to-day basis. That’s why a strategic, long-term view always works best. But which stocks have staying power versus which are flashes in the pan? Sharewise's deep-rooted understanding of fundamental and technical market metrics guides you, ensuring you're not just chasing a trend, but strategically investing in future market leaders.
When you’re considering which
stocks to invest in to implement your long-term investment strategies, here are some tips:
- Diversify your portfolio. Don’t put all your eggs in one basket. Investing in different companies and sectors means that no single stock will have too much of an impact on your overall returns.
- Look at the tax implications. If you invest with a company that provides fully-franked dividends, it means they’ve already paid the tax on the profits. So, you might not have to pay any tax at all on your dividends. Check with your accountant.
- Focus on a long-term strategy and then stick to it. Don’t change your portfolio every time there’s a short-term loss. You’re playing the long game.
- For the long-term, it’s better to invest in a well-performing company with a higher share price than in ‘penny stocks’. Penny stocks are very small companies with low—and volatile—share prices.
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At Sharewise, our approach to investing is built on clarity, precision, and strategy. By combining technical and fundamental analysis, we uncover opportunities and manage risk with a data-driven mindset. Our diversified approach ensures portfolios remain balanced, resilient, and adaptive to global market shifts.
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How Sharewise Helps You Choose the Best Stocks.
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Numbers don't lie. Our performance stats are a testament to our investment prowess.
+26.49%
Our ASX return for FY25
vs. Market Return of 10.21%
+13.35%
Our ASX return for FY24
vs. Market Return of 7.80%
+12.90%
Our ASX return for FY23
vs. Market Return of 8.63%
Past performance is not indicative of future performance.
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