I feel this post was necessary due to all the people I saw on here recently talking about money they lost.
My Guide on HOW TO ANALYZE & RESEARCH A STOCK/ How to do a thorough due diligence/ DD [Due Diligence 101]:
Here are the things I look at when evaluating a stock. (This is my checklist just build from years of wins & losses, things I learned from Pace University and Goldman Sachs). Usually a good due diligence (DD)/ research can take anywhere from 30 minutes to 3 hours. If I am investing large amounts of cash, I want to research thoroughly, so if the stock drops I can stick to my convictions, and forget about emotion.
Before I use my time to research a stock, and read up about it into detail, and dig into the financials, news, 10-Q/ 10-K, etc., I:
- I look at price upside. I look to see what the analysts covering it, have to say about the price targets. (Money is a tool, and you want it to work for you). MarketBeat.com can show you this: https://www.marketbeat.com/stocks/NASDAQ/AAPL/price-target/
- I look at the charts and the technicals. I try to read and interpret the charts to see what previous trading patterns can predict. What are the short-term, mid-term and long-term predictions? A site you can use to interpret the charts for you is BarChart.com and TradingView.com.
https://www.barchart.com/stocks/quotes/AAPL/opinion
https://www.tradingview.com/symbols/NASDAQ-AAPL/technicals/
If it passes these, then I dig deeper.
Other things I look at:
- I dig deeper into technical analysis and the charts. I look at RSI, moving averages, MACD, Stochastic Oscillator, etc.
- Sentiment & News. What are people saying? Google the company.
- Earnings & revenue history. Is there growth? Is there potential? I look at the financials and the projections
- Growth. I look into the financials to look at past growth. I look into news, 10Q's, 10Ks, investor presentations, and statements to look for future growth.
- Financial health. Are the financials strong? (Quick ratio, Profit margin, EPS, Income Statement Trend, Cashflow).
- Valuations. How is this valuated? (PEG ratio, P/E ratio)
- Short selling. How much of this stock is sold short? Are people betting against it?
- What is the put/call ratio? Are people betting against this stock?
- Peers & competition. How does this company stack up against its competitors and peers? How do the financials compare? How to the products compare? Is there a moat?
- Institutional Sponsorship. Are big banks and wall street holding this? How much or this companys stock do they hold?
- Insider Trading. Is the CEO buying or selling shares?
- The amount of ETFs that hold this stock. Will they continue to buy it up and drive price?
- Average volume traded. Is this stock liquid? Would I be able to get my money back? How easy can I trade it.
- Social sentiment. I check what people are saying on twitter and google search trends.
- News moves a stock. So I also use google to find out as much as a company as possible.
There are many sites you can use to dig into a stock such as (1) Yahoo Finance, (2) MarketBeat.com, (3) MacroTrends.com, (4) MarketWatch.com, (5) CNNMoney.com, (6) CNBC.com
I use an excel spreadsheet to organize my research.
As you see, good research and due diligence can take anywhere from 1 to 3 hours. But this is your money, and noone cares more about it than you do.
I created a facebook group, discord, tiktok, instagram and youtube to share more things like this. Feel free to follow:
Submitted February 13, 2021 at 08:30PM by TonyLiberty https://ift.tt/3dcIhm3
