I am for the most part a value investor and as such invest primarily based on fundamentals. Some of the main metrics that I use are:
-Dividend growth rate
-Average EPS growth
I am not going to provide specific numbers for each of the above metrics as it varies from industry to industry. However, one number that I generally view as being important is the forward P/E and I will rarely invest in a company with 1yr forward P/E of over 18 and a 2 year forward P/E of over 15. Due to that fact I generally do not invest in the technology sector (regardless of how great a company’s technology is I’m not going to pay over 18X next years earnings for it). From my experience, growth companies and those with a high P/E will often get caught with “multiple compression” when either the economy stalls or they fail to meet expectations.
I also look at qualitative factors such as:
-barriers to entry
-long term prospects of the industry (ie- I wouldn’t invest in a Cassette tape manufacturer that was trading dirt cheap---unless of course they had some valuable underlying assets such as real estate that weren’t factored into the price)
-management (do not focus on it though)
-cyclicality of the industry
-the fit of the stock in my portfolio
I usually don’t set target prices but in almost all cases I use limit orders when both buying and selling.