Research

Thargor

I dont suppose anyone could be bothered talking us through a typical piece of research they do before taking a punt please? Where they hear of the company in the first place, how they look into it etc? Thanks.

RoadKillTs

Hi Thargor

I just read a few investing / business sites such as Fool, The Street, WSF , Finacial times and learn about the companies there. Also my area is IT so I am generally interested in IT related stocks so for example I would look at the FTSE Techmark index and go through the different companies.

First thing I do it just have a quick look on Morning Star for price info, p/e ratio, what the company has turned over in the last three years, profit margin, eps, broker forcecasts for the next two years.

Then if I happy with that I take a closer look at the business, what it does, how it does it, its competitiors, its track record etc.

One company I'm looking at now is Pace. The make set top boxes. Very simple business, easy to understand and have a huge market share.
I go onto their website and look at the annual reports, look at new products they are developing etc.
Also look at how the company is growing. In the case of Pace it is growing nicely. The bought the Philips's set-top box business plus another smaller acquisition a few weeks ago.

Then I look at things like the board of directors. Who are they, what do they do, how long have they been there, what companies did they work for before, were those companies successful e.t.c.

For me the most important thing about investing is that when you buy stocks you are buying a business.

Hope this helps.

Thargor

Thats excellent Roadkill thanks for that, and the links.

pocketdooz

RoadKillTs wrote: »

Hi Thargor

I just read a few investing / business sites such as Fool, The Street, WSF , Finacial times and learn about the companies there. Also my area is IT so I am generally interested in IT related stocks so for example I would look at the FTSE Techmark index and go through the different companies.

First thing I do it just have a quick look on Morning Star for price info, p/e ratio, what the company has turned over in the last three years, profit margin, eps, broker forcecasts for the next two years.

Then if I happy with that I take a closer look at the business, what it does, how it does it, its competitiors, its track record etc.

One company I'm looking at now is Pace. The make set top boxes. Very simple business, easy to understand and have a huge market share.
I go onto their website and look at the annual reports, look at new products they are developing etc.
Also look at how the company is growing. In the case of Pace it is growing nicely. The bought the Philips's set-top box business plus another smaller acquisition a few weeks ago.

Then I look at things like the board of directors. Who are they, what do they do, how long have they been there, what companies did they work for before, were those companies successful e.t.c.

For me the most important thing about investing is that when you buy stocks you are buying a business.

Hope this helps.

Excellent post - what I would add is alwasy keep one eye on the debt levels of a company. A lot of the value of a company can be destroyed by high debt levels and as we are entering a period of (likely) higher inflation rates, companies with a lot of floating rate debt will have a significant increase in the amounts of cash interest they will be required to pay. This will eat up cash flow and lower valuations.

Another excellent resource for company information is the Investor Relations section of every public company's website. There you will find financials, presentations, reports etc.etc.

RoadKillTs's suggestion of sticking to an industry you have an interest in (at the beginning at least) is an excellent one.

Good luck