This thread was originally published as a Twitter thread by Andrew here
I've worked 15+ years on Wall St. and have a finance degree. Here are 16 tips that will make you a better investor: Don't buy another stock without reading these 16 tips: Here are 16 tips when looking at when a stock. I like to know the:
- Business model of the company
- Financial health
- CEO, Management Team & Leadership
- Institutional Sponsorship
- Future growth potential
- Earnings/ revenue history
- Valuations
- Recent News
- Price upside/ targets & Analysts rating consensus
- Peers & competition & competitive landscape
- Insider Trading
- Amount of index funds that hold this stock
- Social sentiment
- Average Volume
- Short selling & put/call ratio
- Charts Analysis & technical indicators
Now, let's discuss each:
- Know the company. Use google to find out as much as possible.
What do they do? How do they make money? Why are they important? What are their products?
Positives? Strengths? Moat? Advantages? Opportunities? Growth? Catalysts?
Downside? Negatives? Weaknesses? Threats? Risks?
2. Financial health
Are the financials strong? Is the company financially healthy? Are cash flows from operations positive? How are Investing & Financing Cashflows? Is net income growing? Are profit margins increasing? Is Quick ratio over 2 to sustain operations? Is EPS growing?
3. CEO, Management Team & Leadership
Check Glassdoor & Indeed to learn about the management of the company, and google their CEO. A CEO with low/ bad ratings is a bad sign!
4. Institutional Sponsorship. Are big banks and wall street holding this? How much or this company's stock do they hold?
5. Growth.
Look into the financials and look at past growth. Look at recent news, 10Q's, 10Ks, investor presentations, and statements to look for future growth. Know about new products, or a changing landscape. How will the company scale?
6. Earnings & revenue history.
Is there growth? Is there growth potential? Look at the financials and the projections. Have they missed earnings? Have they beat earnings? Has earnings remained flat or grew consistently?
7. Valuations. How is it valuated? (PEG ratio, P/E ratio). Is it undervalued? How does the valuations compare to its peers or competitors in the industry?
8. Recent News.
Google the company and look at recent articles. What are people saying? What are bloggers saying? What is the news saying? Any new news? Bad news? Good News? Reasons for movement in recent stock price?
9. Price upside/ targets & Analysts rating consensus.
What do the analysts covering the stock think it's worth? What do the analysts covering it, have to say about the price targets?
10. Peers & competition & competitive landscape.
How does this company stack up against its competitors & peers? How do the financials compare? How to the products compare? Is there a moat?
11. Insider Trading.
Is the CEO buying or selling shares? Is management buying or selling shares?
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How many different Index Finds own this stock? Will they continue to buy it?
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Social sentiment. Check what people are saying on twitter and google search trends.
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Average volume traded.
Is this stock liquid? Will you be able to get your money back? How easy can you trade it. How large/small are the bid/ask spreads?
15. Short selling & put/call ratio?
How much of this stock is sold short? Are people betting against it? If so, why are they?
Are people betting against this stock? Then is so, research why. This might be reasons to be weary.
16. Charts Analysis & technical indicators.
What do the charts say about momentum? What are the short-term, mid-term and long-term predictions? Take a look at RSI, moving averages, MACD, Stochastic Oscillator, etc.