How long does it take you to analyze a stock? Two to three hours is common. Open CafeF, read news, check financial statements on Vietstock, look at charts on TradingView, then compile everything...
But with a clear checklist, you can screen much faster. Here is the 10-point system we use daily.
Core principle: A checklist does not help you find the best stock — it helps eliminate 80% of stocks not worth buying, saving time for the ones that truly deserve attention.
Part 1: Fundamental (4 Points)
The four most essential financial metrics. If a stock fails 2 out of 4, consider skipping it to save time.
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P/E vs sector average — P/E (Price-to-Earnings) tells you how much you pay for each dollar of profit. Always compare against the sector average, not in absolute terms. A P/E of 20 in the tech sector is normal, but in the steel sector, it is expensive.
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ROE over 3 years — above 15%? — ROE (Return on Equity) measures how efficiently the company uses shareholders' capital. Above 15% is good, above 20% is excellent. Important: look at the 3-year trend, not just one year.
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Debt/Equity (D/E) — below 1x? — D/E shows the level of leverage. Below 1x is safe. Above 2x requires caution — unless it is a bank (high D/E is inherent to the industry).
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3-year revenue — growing consistently? — Steady revenue growth over 3 consecutive years signals the business is truly expanding, not just experiencing a one-time spike.
Part 2: Technical (3 Points)
Technical analysis helps determine timing — when to buy, not just what to buy.
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6-month trend — up / down / sideways? — What direction is the stock trending? An uptrend is a positive signal. Downtrend + low volume = not yet the right time.
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Volume — increasing or decreasing? — Rising volume during price increases means money is flowing in, and the trend is trustworthy. Falling volume during price increases signals caution — it could be a fake breakout.
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Near support or resistance? — Buy near support zones, avoid buying near resistance. Support zones give you a margin of safety — if you are wrong, your loss is smaller.
Part 3: Sentiment (3 Points)
Market sentiment — a factor many investors overlook but which can be highly significant.
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Recent news — positive or negative? — News affects short-term prices. A series of negative headlines could create a buying opportunity (if fundamentals remain strong), but could also signal serious underlying problems.
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Insider activity — is management buying or selling? — Company leaders understand the business better than anyone. If they are buying, that is a positive signal. Heavy insider selling? Red flag.
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Foreign investors — net buying or selling? — Foreign institutional investors have professional research teams. They are not always right, but their activity is worth monitoring — especially when there are consecutive sessions of net buying or selling.
How to Score
Each criterion: 0 points (poor), 1 point (average), or 2 points (good). Maximum total: 20 points.
| Total Score | Action | Notes |
|---|---|---|
| 15 — 20 | Consider buying | Perform deeper analysis, identify entry point |
| 10 — 14 | Watch | Add to watchlist, wait for improvement |
| < 10 | Skip | Not worth the time — move on |
Important note: The checklist is a screening tool, not a final decision. A stock that scores 15 points still needs deeper analysis before buying. This is the first step, not the only step.
Apply It Quickly with AI
Running the 10-point checklist manually still takes 10-15 minutes per stock. But with AI, you can cut that to under 1 minute.
For example: ask FinStock "Quick check VNM" — the AI evaluates all 10 criteria with automatic scoring. You just read the results and decide.
See also: Stock Screening from A to Z.