[Kareem Hamza]

I am MBA student in KFUPM, Dhahran. I am working to build a portfolio to select the best companies in order to invest a certain amount of money. I am not familiar with some stock terms and which better measures used to depict the profitability power and risk for Saudi companies.



The objective of the project is to maximize the profit or minimize the risk (optimization problem). I found a website which called Bakheet financial advisors (http://www.bfasaudi.com). This website provides detailed information on Saudi stock market. They daily update its contents.



I found some measures used to show the company performance. What is the best measure used if I am planning to maximize the profit?

These measures are:

• Earning per share (EPS)
• Dividend (D)
• Dividend Yield (DY)
• Book Value
• Price Earning Ratio (PER)
• Payout Ratio (PR)
• Price Book Ratio (PBR)
• Return on Asset (ROA)
• Return on Equity (ROE)

In addition, I found four measures for market risk. What is the best measure used if I am planning to minimize the risk? These measures are:

• Volatility
• Correlation
• Beta,
• Standard Deviation

Your help is highly appreciated.



Thanks very much.