Individual Stocks

Selecting Individual Stocks

What types of financial signs should I investigate?

Investors need to look for various financial signs that signify a buying opportunity. Many experts believe that investors should 1) find companies with strong quarterly earnings growth over a long time period; 2) consider the size of the company’s debt load (especially relative to other competitors); 3) consider the diversity or concentration of the company’s income streams; 4) consider the company ’s annual sales growth over time; 5) identify the company’s ability to make great products year-in and year-out; 6) determine the company’s ability to control expenses; and 7) determine whether the company uses capital wisely. You may also want to investigate if the company spends money appropriately on other cash-intensive items, such as people, equipment, marketing, research and development, etc.



Close

This is a web preview of the "The Handy Investing Answer Book" app. Many features only work on your mobile device. If you like what you see, we hope you will consider buying. Get the App