| Are you looking for a stock market tip? In this article | | | | 4.) Company management - who is running the |
| I am going to give you a tip that everyone should | | | | company? Look at the bios of company |
| know about. | | | | management, who are they and what kind of |
| This stock market tip is to - perform due diligence. | | | | experience do they have. Also see if the company |
| What is due diligence? Basically it means researching a | | | | managers hold a large amount of company shares, |
| stock to see if it is worth buying. Here a ten steps | | | | high share ownership by managers is a good sign |
| to follow when performing due diligence. | | | | 5.) Check the balance sheet - look up the company |
| 1.) Market capitalization - find out the company's | | | | balance sheet, what is the overall level of assets and |
| market capitalization, doing this will help you figure | | | | liabilities? Check to see how much cash the company |
| out how volatile the stock will be, how broad the | | | | has as well as how many outstanding debts are held |
| company's ownership is and the potential size of the | | | | 6.) Stock price history - how long have all classes of |
| companies markets. Also find out what exchanges | | | | shares been trading? What is the long and short term |
| the stock trades on. | | | | price movement? Is the stock price smooth and |
| 2.) Look over revenue, profit and margin trades - | | | | steady or choppy and volatile? Answering these |
| look up the revenue and income figures for the past | | | | questions will give you a good idea of what the |
| three years. Look for trends in these figures such as | | | | stock will do in the future. |
| whether growth is choppy or inconsistent or if there | | | | 7.) Level of risk - it is important to understand the |
| are any major swings. Also review the margins to | | | | levels of risk involved in the stock. Ask yourself if |
| see if they are rising, falling or remaining steady. | | | | there are any future risks involved in owning this |
| 3.) Competition - what industry does the company | | | | stock. |
| operate in and how much competition is there. | | | | By following the above steps you will be able to get |
| Compare your company to its closest three | | | | a good idea if your stock is worth investing in. |
| competitors. | | | | |