Learn about the company's business segments, its manufacturing, marketing processes, how it makes money, among others. Stick to businesses you understand.
Understand the industry the company operates in. Figure out if it is cyclical or not. Find out the competitive intensity and on what accounts it differs from its peers.
To begin investing on your own, knowing how to interpret financial statements is crucial. Also, learn financial ratios.
Evaluate the management quality. Check who runs the daily affairs, if the promoter has external interests, how the company treats minority shareholders, among others things.
Consider the company’s growth plans, strategies to diversify or enter a new business. Check how it will fund these plans and its profit expectations.
Valuation is key. Try to find approximate returns you will make at the company’s current price. If it is below the minimum required return, keep the stock on the watch list.
Remember these analyses are performed together and the metrics vary across sectors. So to make your investing journey easy, you can subscribe to our stock advisory service.