What are the most important facts to know about a company before you purchase their stock?

Question

What are the most important facts to know about a company before you purchase their stock?

Answer 1

Do some research. Know what the company does. You need to know the latest news about it and if the CEO is experienced. Use Yahoo Finance. Find out what the company specializes in and if it is a good business motto. For example, EBAY has a great business motto, they let the consumers do the business.Just use Yahoo Finance to do some research on the company and you can always consult your stock broker.

Answer 2

You should definitely visit the company's website, read about what they actually do, how they get money (revenues), look at financial statements (if you have knowledge), see how profit (also known as net income in their income statements) patterns are in that company (are they making more money this year than last year, what about now and two years ago?), visit some websites (Yahoo Finance is a nice one) and check the graphs with their stock prices to see how volatile they are, etc.

You should also check their competitors, and the same information about them, and compare the companies to see if the company you are researching is actually the best in the industry, or one of the best.

Answer 3

Know their products, know their industry, understand their capital structure (debt to equity), know their margins, what are their earnings, look at their history, how do they stack up against their competition, how much do they spend on R&D.

Answer 4

Typically, I buy a stock hoping to make a profit from it in some future time. To help me decide which stocks to buy, I look at technicals, never on the fundamentals.

Three things I look for are:

- is the stocks' price holding up above support?

- did price close above oversold level?

- was there a reverse candle stick pattern on the above two conditions?

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