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.


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