15 tips to make you a better investor!

By Andrew Lokenauth

Here are 15 tips that can help you be a better investor in the stock market. Don’t buy another stock without researching these 15 items:

1. The Company Business Model
2. Financial Health
3. CEO, Management Team & Leadership
4. Institutional Sponsorship
5. Future Growth Potential
6. Earnings/ Revenue History
7. Valuations
8. Recent News
9. Insider Trading
10. Peers, Competition & Competitive Landscape
11. Price Upside, Price Targets & Analysts Rating Consensus
12. Amount of Index Funds that hold this Stock
13. Social Sentiment
14. Average Volume
15. Short Selling & Put/Call ratio

1. Understand how to company will make money. Understand:

- What they do

- How they make money

- Why they are important

- Their products

- MOAT/ Strengths/ Positives/ Advantages

- Opportunities/ Growth/ Catalysts

- Downside/ Negatives/ Weaknesses/ Threats/ Risks

2. Financial health is important:

- Healthy Balance Sheet & Income Statement

- Increases in revenue, net income, EPS & profit margins — Quick ratio > 2 to sustain operations

- Positive cash flows from operations

- Investing & Financing Cashflows?

3. CEO, Management Team & Leadership:

- Check Glassdoor & Indeed to learn about the management

- Google the CEO (A CEO with low/ bad ratings is a bad sign)

4. Institutional Sponsorship:

- Are big banks and Wall St. holding?

- How much of this company’s stock do they hold?

5. Growth:

- Look at past growth trends in financials

- Look at recent news, 10Q’s, 10Ks, investor presentations, and statements to look for future growth news

- Know about new products, or a changing landscape

- Will the company scale?

6. Earnings & revenue history. Look at the financials and the projections:

- Was there growth?

- Is there growth potential?

- Have they missed earnings?

- Have they beat earnings?

- Has earnings remained flat or grew consistently?

7. Valuations:

- Overvalued or Undervalued? (PEG ratio, P/E ratio)

- How do valuations compare to peers & competitors in the industry?

8. Recent News. Google the company and look at recent articles:

- Bad news?

- Good News?

- Any new news?

- What are people saying?

- What is the news saying?

- What are bloggers saying?

- Reasons for recent movement in recent stock price?

9. Insider Trading:

- Is the CEO buying or selling shares?

- Is management buying or selling shares?

10. Peers, competition & competitive landscape:

- How does this company stack up against its competitors & peers?

- How do the financials compare?

- How to the products compare?

- Is there a moat?

11. Price upside, price targets & analysts rating consensus:

- What do the analysts covering the stock think it’s worth

- What do the analysts covering it, have to say about the price targets?

12. How many different index funds own this stock? (Will they continue to buy it?)

13. Social sentiment:

- Check what people are saying on twitter

- Check google search trends

14. Average volume traded:

- How liquid is the stock

- How large/small are the bid/ask spreads?)

15. Short selling & put/call ratio?

- How much of this stock is sold short?

- Are people betting against this stock? If so, research why

What would you add?

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