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how to analyze companies when buying stocks

posted March 22, 2008 - 12:49am
how to analyze companies when buying stocks

Things You’ll Need:
Paitence,coffee,a clear mind ,money A lot or little,discipline and an internet broker and account Such as sharebuilder.com
Step 1:
First get a brokerage account through companies such as TDAMERITRADE,SHAREBUILDER, OR SCOTTRADE just to name a few

Step 2:
Go on line into the research tools and pull up any company you like

Step 3:
Click on the profile tab and scroll down to their management page

Step 4:
On the page is all the numbers such as profit management,and a whole slew of info.Here is just 10 things that will give you a lot of info

Step 5:
1 BETA this should be a low number 2 MARKET CAP this should be high millions to billions 3 OUTSTANDING SHARES usually high 4 DIVIDENDS good companies pay them and even increase them 5 TOTAL DEBT shold be very low 6 EARNINGS shold be high 7 CASH FLOW also should be positive and high 8 RETURN ON EQUITY should be very high 9 RETURN ON ASSETS,INVESTMENTS AND GROSS MARGIN should be high 10 PROFIT MARGIN should also be high

Step 6:
All of this info can be obtained through a prospectus if you call a company or go on their web site. You can even view files on the sec website to check on management and if they own stock with their own money( this is a very good sign usually unless inside trading is going on)


Website: http://www.ehow.com/how_2245738_read-profiles-comp...

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