My Guide on HOW TO ANALYZE & RESEARCH A STOCK/ How to do a thorough due diligence/ DD [Due Diligence 101]:

Many of you requested a Youtube video, which I will shoot sometime this weekend, but I want to help you immediately, so 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.

Anyone good at editing videos? I could use help. Or any skills in creating a video thumbnail? (I am just happy I can make a positive impact in peoples lives.) Anyways:

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:

 

  1. 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/

  2. 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:

 

  1. I dig deeper into technical analysis and the charts. I look at RSI, moving averages, MACD, Stochastic Oscillator, etc.

  2. Sentiment & News. What are people saying? Google the company.

  3. Earnings & revenue history. Is there growth? Is there potential? I look at the financials and the projections

  4. 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.

  5. Financial health. Are the financials strong? (Quick ratio, Profit margin, EPS, Income Statement Trend, Cashflow).

  6. Valuations. How is this valuated? (PEG ratio, P/E ratio)

  7. Short selling. How much of this stock is sold short? Are people betting against it?

  8. What is the put/call ratio? Are people betting against this stock?

  9. 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?

  10. Institutional Sponsorship. Are big banks and wall street holding this? How much or this companys stock do they hold?

  11. Insider Trading. Is the CEO buying or selling shares?

  12. The amount of ETFs that hold this stock. Will they continue to buy it up and drive price?

  13. Average volume traded. Is this stock liquid? Would I be able to get my money back? How easy can I trade it.

  14. Social sentiment. I check what people are saying on twitter and google search trends.

  15. 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.comI use an excel spreadsheet to organize my research.