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:
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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/
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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:
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I dig deeper into technical analysis and the charts. I look at RSI, moving averages, MACD, Stochastic Oscillator, etc.
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Sentiment & News. What are people saying? Google the company.
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Earnings & revenue history. Is there growth? Is there potential? I look at the financials and the projections
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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.
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Financial health. Are the financials strong? (Quick ratio, Profit margin, EPS, Income Statement Trend, Cashflow).
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Valuations. How is this valuated? (PEG ratio, P/E ratio)
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Short selling. How much of this stock is sold short? Are people betting against it?
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What is the put/call ratio? Are people betting against this stock?
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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?
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Institutional Sponsorship. Are big banks and wall street holding this? How much or this companys stock do they hold?
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Insider Trading. Is the CEO buying or selling shares?
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The amount of ETFs that hold this stock. Will they continue to buy it up and drive price?
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Average volume traded. Is this stock liquid? Would I be able to get my money back? How easy can I trade it.
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Social sentiment. I check what people are saying on twitter and google search trends.
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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.