Find Great Business (Stock) to Invest in
This is correct; the key to a solid investment is to find a good firm, and the second most crucial aspect is to acquire the shares at a reasonable price.
When looking for a good firm or an exceptional business to invest in, keep the following aspects in mind that are advantageous or vital to every investor in mind.
It is critical to note that before investing in a company's stock, conduct your research and bear in mind that investing might be risky if you do not put in any effort.
- Simple Business: Considering it is a clear and simple business, it is simple to understand where the money comes from or it is up to your circle of competence.
- Earnings of the company are expected to be consistent: The company's earnings are what it makes each year after deducting all expenditures and taxes. Understand the company's goal to boost earnings and check in on a regular basis to see if the plan is working. These are ways for increasing a company's earnings.
- Reduce costs.
- Raise prices
- Expand into new markets
- Sell more of its product in the old market or revitalized, close, or otherwise dispose of a losing operation.
- Reviewing the Institution's ownership: If you discover a stock with little or no institutional ownership, it suggests you need to uncover a prospective winner. You've won twice if there isn't any analyst coverage.
- The financial situation of the company
- Competitive position
- Identify the stock category as proposed by Peter Lynch: Determine if you are dealing with slow growers, stalwarts, fast growers, a turnaround, an asset play, or a cyclical. The next stage is to discover as much as possible about what the organization is doing to increase wealth, growth, or whatever good event is anticipated. This is known as "Story".
- If it's a slow-growing company. You script "You are in it's for dividend".
- If it's a cyclical company your script "Business condition, inventories, and prices".
- If it's an asset play - then what are assets? How much they are worth?
- If it's a turnaround then has the company gone about improving its fortunes and is the plan working so far?
- If it is a stalwart then the key issues are the P/E ratio whether the stock already has had a dramatic run-up in price in recent months and what if anything is happening to accelerate the growth rate.
- If it is a fast grower then where and how can it continue to grow fast.
- Some famous numbers check
- Percentage of Sales
- The Cash position
- Dividends
- Book Value
- Cash Flows
- Inventories
- Pension Plans
- Growth Rate
Best wishes and keep investing.🙋🙋🙋🙋🙋🙋🙋💰💰💰💰💰🤑🤑
