Y Answers! What Should You Know About A Company’s Stock?

1mil asks Yahoo! Answers users: When considering buying a company’s stock, what information do you use to help you make a decision?

Best Answer: By Dean

Listen to or read the transcripts of the last conference call, look at the balance sheet, cash flow statement and income statement, the P/E in relation to other competitors and all recent news that may affect that stock.

Look at insider transactions, look at most importantly the PEG and that by my thinking should be under 2 and the less the better. Look at cash flow and debt –short term liabilities—does the company generate enough cash flow to pay short term liabilities and are they generating a profit in general. I also look at some technical analysis — moving averages and Bollinger bands along with candle stick charting to see trends and get the hopefully best entrance and exit spots possible when trading.

Read the company website and you also must know what day they are reporting their numbers. You should also have a knowledge of what the whisper numbers are—whats really expected from the street.

Go to whispernumbers.com for those. When trading keep a pulse on the market on CNBC at the very least if not a financial daily newspaper like Investors Business Daily. I also want to recommend Scottrade because they not only have a great trading platform, the keep commissions low and I cant stress the importance of that.

Second Best Answer: By Joe
I look at these things: Forward P/E and earnings. The balance sheet. You never want to buy a company with too much debt. Check out EBAY, almost no debt. I also like to look for trends going forward to see what the company is doing within its industry to stand out and make the best product/service. These are some stocks I personally like right now:

EBAY
CHL
NJ
MOT
CCL

All are companies that make tons of money here and overseas, so you get the benefit of the weak dollar. You also get low debt levels and respectable P/E ratios. If you put some money to work in these stocks, you won’t be sorry because all are industry leaders and have recognizable brand names.

I recommend reading:
The 100 Best Stocks You Can Buy. 2007 edition by John Slatter.

Third Best Answer: By Elizabeth
One important thing that I have recently learned is that you should find out if the company is in the red. For example, Applebees is in debt and shuts down restaurants every year. However, Walgreen’s is booming. They build new stores strictly from the profits that they make from their other stores, so they continue to grow.