If you were to purchase stock, what sort of information about the company’s stock would you use to make your decision to buy shares of a certain company?
When I buy stock, I first check its 5 to 10 year history of earnings per share and sales. If its growth has been steady, I'm interested. I check the analysts' prediction for the future of this company's growth. I check its P/E ratio and decide whether the price is too high at this time.
I also want the company's assets to be much greater than its liabilities and its debt to be much less than its working capital.
When considering purchasing stocks of a certain company, there are several key pieces of information you would typically use to make an informed decision. Here are some factors to consider:
1. Financial Performance: Start by analyzing the company's financial statements, such as the income statement, balance sheet, and cash flow statement. Look for consistent revenue growth, a healthy profit margin, manageable debt levels, and positive cash flow.
2. Earnings and Revenue Growth: Assess the company's historical and projected earnings growth rates. Look for consistent or increasing earnings over time. Similarly, analyze revenue growth trends to see if the company is expanding its market share.
3. Industry and Competitive Analysis: Evaluate the company's position within its industry. Consider factors such as market share, competition, barriers to entry, and potential for innovation. Analyze the company's competitive advantages, such as unique products, strong brand recognition, or proprietary technology.
4. Management and Leadership: Assess the company's management team, including the CEO and other executive leaders. Look for leaders with a track record of success and experience in the industry. Evaluate their strategic vision, decision-making abilities, and alignment with shareholders' interests.
5. Valuation Metrics: Determine if the stock is trading at an attractive valuation. Compare key valuation metrics, such as price-to-earnings (P/E) ratio, price-to-sales (P/S) ratio, and price-to-book (P/B) ratio, to industry peers or historical averages. Consider factors like dividend yield and price-to-earnings growth (PEG) ratio.
6. Dividend History and Policies: If you are seeking income from your investments, examine the company's dividend history. Evaluate the dividend yield, dividend growth rate, and the company's commitment to paying dividends regularly.
7. News and Market Sentiment: Stay updated on recent news, events, and market sentiment related to the company. Consider factors such as product launches, regulatory changes, lawsuits, or any other information that could impact the company's performance and stock price.
It's important to note that this list is not exhaustive, and individual investors may have different preferences and strategies. Consulting with a financial advisor or doing further research can also provide valuable insights when making investment decisions.