ADVFN Logo

We could not find any results for:
Make sure your spelling is correct or try broadening your search.

Trending Now

Toplists

It looks like you aren't logged in.
Click the button below to log in and view your recent history.

Hot Features

Registration Strip Icon for default Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.

Investor principle: Do your own research

Share On Facebook
share on Linkedin
Print

It is important that you do your own research, that you investigate before investing.  Understanding what makes a company successful is vital. How does the business work? What is its performance over time and how does that compare with competitors? What stimulates sales activity?  What pressures might prevent a growth in sales?

©

In answering these types of questions, you increase accuracy in judging why the company is currently out of favour and whether a poor situation is temporary, or the company will be consumed by it.

Both John Templeton and Warren Buffett spent a great deal of time studying an industry, the competitive position of the firm and personal qualities and competence of the management.

Home-in on the key value drivers for the industry, e.g., with miners it is reserves, with retailers it is profits and competitive strength.

When researching a company spend as much time researching its competitors as the company itself.   Indeed, the best information comes from competitors rather than directly from the company. Competitors put a great deal of effort into competing and thus develop a deep knowledge of the weakness and strengths of the opposition. Ask various company executives which company in their industry they would invest in, other than their own.  They are generally optimistic about the prospects for their own firm and so may give a less than frank assessment. But if you ask about a competitor within thirty seconds you’ll have a fulsome analysis.

An indicator that the firms in a particular industry are under-priced is an increase in merger and acquisition activity; if they are buying each other at bid premiums of 50% or more perhaps share prices are too low.

Also, companies buying

………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1

 

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

 
Do you want to write for our Newspaper? Get in touch: newspaper@advfn.com