Stock Research Checklist – Profit Margin

3 years ago JCprojectfreedom 0
Net profit margin is a percentage in terms of how much net profit is generated from each dollar of revenue. Net profit margin = Net income / Revenue x 100 If a company increases its earnings, that is good. The next thing you need to identify is whether or not a company can maintain that Read More

Stock Research Checklist – Equity

3 years ago JCprojectfreedom 0
Return on Equity is how much profit the company is generating with the shareholder’s money. As a shareholder, you can earn lot of money over time with a company that has a high ROE. What is the Company’s ROE for the last 10 years? Does it trend upward? ROE = Net Income / Share Holder’s equity In EPS, Read More

Stock Research Checklist – Debt

3 years ago JCprojectfreedom 0
DebtDebt is an important part of business. If it manageable debt, then it is acceptable. If the debt load is very high, it will be very hard for that business to succeed, sometimes the company will even end up in bankruptcy. The investors will end up losing all their money. Some industries are capital intensive, they Read More

Stock Research Checklist – Earnings

3 years ago JCprojectfreedom 0
Examine Earnings Growth  Earnings Per Share (EPS) = Company Net Income / Number of Shares Outstanding When you are using the number of outstanding shares, use the fully diluted shares instead of outstanding shares) Here is the calculation to get the EPS growth rate FV = Future EPS value PV = Current EPS value N Read More

Stock Research Checklist – Business Characteristics

3 years ago JCprojectfreedom 0
Are you able to understand the Business Thoroughly? Is it a Simple Business? What are the company products? How does the company generate revenue? How is the company market its goods and services? What is the competitive landscape of the business? Do you understand the business life cycle? Companies that are involved in simple type of business Read More

Invest now

3 years ago JCprojectfreedom 0
Invest Now Most people wait until they are in their thirties, forties and fifties to start saving money. They realise that they are not getting any younger and will require additional money for retirement. The trouble is, by the time they realise they ought to be investing, they have lost valuable years when stocks could have helped them with their goals. Read More

Moats in Investing

3 years ago JCprojectfreedom 0
Keeping Competitors Out Warren Buffett says,” A truly great business must have an enduring “moat” that protects excellent returns on invested capital. A company needs to do something very well in order to grow their business profitably. A moat protects a business from its competitors. It is a durable competitive advantage which keeps competitors away Read More

Low Interest Rates Dilemma

3 years ago JCprojectfreedom 0
Low Interest Rates Dilemma Low interest rates will create a dilemma. Will you accept a low return in order to protect your principal? Will you take on higher risk to achieve higher return? Pay attention to costs In a low interest environment, investing expenses will have a larger impact in eroding your gain. For example, a mutual fund with Read More

What should I do when the stock price drops?

3 years ago JCprojectfreedom 0
What should I do when the stock price drops by 30%? Knowledge is a very powerful tool. Investing requires knowledge and familiarity of the companies that you choose to plough your hard earned money into. This may be a good reason not to own too many stocks but invest within your circle of competence. You need to Read More

Cash Flow Statement

3 years ago JCprojectfreedom 0
The Statement of Cash Flows This statement shows the value created by the company based on how much cash generated year to year. This is the most important section of the financial statements. The cash flow statement strips away all the abstract, non cash items such as depreciation which you see on income statement and Read More