Schaeffer's Investment Research Experts recently offered their top tips on researching stocks.
CINCINNATI, OH / ACCESSWIRE / December 2, 2020 / Researching is one of the most critical parts of purchasing a stock. Experienced investors have likened the process to that of buying a new car, because there are so many aspects to consider. The investment experts at Schaeffer's Investment Research recently offered their top tips for researching and evaluating any stock.
'First, you need to locate all of your stock research materials,' Schaeffer's Investment Research experts said. 'Evaluate the company's financials by accessing the documents they must file through the U.S. Securities and Exchange Commission.'
Schaeffer's Investment Research experts explained the Form 10-Q and Form 10-K are reports that can be easily accessed. The Form 10-K is an annual report, which includes independently audited financial statements. Form 10-Q is a useful quarterly update on company operations and financials. If you're working with a stock brokerage firm, you should also be able to find highlights from these forms on the firm's website.
'Reading countless financial reports can be exhausting, so we always suggest focusing on the most important features of the company financials, such as net income, revenue, and earnings per share,' the team at Schaeffer's Investment Research said.
The experts at Schaeffer's Investment Research emphasized the importance of qualitative research. The quantitative research is that which reveals a company's black and white financials. However, qualitative research is what's seen between the lines. Qualitative research offers a truer understanding of a company's prospects.
'You're going to want to ask a lot of questions when researching a stock,' Schaeffer's Investment Research experts said. 'You want to have a clear understanding of how the company makes money, why it has a competitive advantage, and how solid the management team currently is.'
The Schaeffer's Investment Research team explained that these questions can help you determine what could go wrong when purchasing a certain stock. A poor management team or one composed entirely of company insiders. A healthy board of directors is one with a number of individuals who think independently. These questions can also help you determine any potential red flags that should prevent you from making the investment, such as a new CEO changing the direction of a business or an important patent expiring.
'Now, it's time to put your research to work,' the experts at Schaeffer's Investment Research said. 'Combine all of the elements of your research, from concrete financials to internal company dynamics, to determine whether or not you want to invest in a long-term partnership with this company.'
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SOURCE: Schaeffer's Investment Research
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