What do you look for in a company before you buy their stock?

What key metrics do you analyze before purchasing stock?

3 Answers

  • 1 decade ago
    Favorite Answer

    Free Cash Flow to show if the company is earning money. Return on Equity to show it the management is strong.

    PEG to show if the company is fairly priced to it's growth rate.

    Return on Assets if it is a capital intensive business.

    R&D spending if is in a field where improving technology over time is important.

  • 1 decade ago

    your question is useless without discussion of my trading time frame and style.

    and it can't be applied to your situation without knowledge of your trading time frame, objectives, and style. all of which depend on your lifetime financial plan, which we know nothing about.

    so if I told you that i looked only for stocks hitting a new 52 week high on 50 day avg volume of at least 100k shares per day with a daily volume surge to at least 200k shares and share price between 15 and 50 USD ... you'd still not know what kind of trader I am or whether my ideas have any merit for your situation at all.

    you have far to go yet.

    don't bet very much until you know more -- guys like me are looking to take every dollar you bet.

    Source(s): 8-) sometimes a trader. I'm mostly out right now -- my methods don't work well in declining markets.
  • 1 decade ago

    I don't do much................I find them in the newspapers(ideas) and see if it seems like a winner to me.................I hold from a week to two years...........

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