Stop overthinking and be starting, there is no need paying huge sums for research.
You have been wandering of how to invest in a company because you want to invest your money for whatever reason but the barrier is how do you know the company or firm is worth investible? Do not worry, I got you.
All companies who are ready to be invested have some qualities you should look out for before investing your assets. They are not cumbersome to see them from afar if you are willing to invest at all. The features below are not to be skipped;
Check The “Boss”
Mostly, the Chief Executive Officers (CEO) of every company are classified as the Boss. So yes, you are a boss if you own any firm out there. But you can still invest your money elsewhere to help yourself and your business.
Now, every CEO of a company is accountable for the future of his/her company and so, you should make sure to check if the CEO has a track record of sharp business moves on their resume. Most CEOs started from somewhere before getting to where they are now and you should make it a must to look into where they are coming from to see even if whether they know what they are doing, a reason may be that, most CEOs inherited the company for instance Apple, Maserati and many others, some inherited without passion and their companies have become the riskiest company to be have invested.
The quickest ways to track them more is through google, yes, google knows something about every company who is ready for investors because you even got to know they are ready for your money through internet and for that matter that should be the first place to learn about the CEOs.
Also, their LinkedIn profile, recently LinkedIn has become an Ish when it comes to business, employers and employees and due to that almost every company has an account there together with their CEOs, so go to their profile and you will get to know every bit of their skills and achievements over the past.
Moreover, now every company under the sun ready for real business has a website to which you can find everything about the company there. Visit their websites and check the “About Us” page because everything you need to know about the company is there. About the CEO, the employees, the Board of Directors and what have you.
Assess The Company Business Model.
Every company has its own impact on the market due to what the goods and services they produce, are their products even relevant on the market, how are their goods and services patronise, begin with yourself, would you recommend their products for yourself if you may need such.
To whom are they selling to, you should check their target market because their products may be requested by a few but valuable than the company requested by many. Weighing Apple and some Android products.
All successful companies compete with each other on the market today, so before you invest, know whom they are competing with and how they are faring in their competition and how they may fare in the future alongside competing with new companies. Many successful companies have fallen off due to the competitions, some successful ones may even fall off again in the near future if critical measures are not taken quickly.
Make sure to understand how the company operates, because some shadow what brings wealth to the company because they themselves know their services could not make them.
Contemplate What Competitive Advantages A Company Has.
The company should have a competitive advantage over other similar companies which will last for longer time.
There is no doubt that a company with a major lead over its competition is a key sign of finding a good stock to invest in.
The Competitive Advantage should be quite difficult for other companies to emulate and check at how often the company implements policies to compete with their rivals keeping them always up there.
Examine Revenue Trends and Price History.
Every quarter of a year, companies release a report on how the company is faring, their revenue may be up or down as long as business is considered.
This same report is released at the end of every year also depicting faring of the company, but here is the critical point, should it be that for the past five years the company keeps on decreasing in yearly revenue, it prones the company to high risk.
How come a company whose revenue decreases at the end of every year; this is to tell you the investor to back off such company.
Check the track record of the company’s yearly report and see if the company is worth investing because it is not easy taking such risk. The company should increase in revenue and make the right steps and have firm sales strategies.
A company has decreasing net income year to year, its growth may not be sustainable. A company may be good to invest if the net income increase overtime.
Examine The Profit Margin.
The sole aim of the company you want to invest is to maximize profit. And you the investor also wants profit in which is the dividend and the profit margin of the company can decide your dividend at the end of the tenure.
The percentage of the revenue that the company takes in as profit is the Profit margin.
Stable and growing profit margins are a good signal for investors as those profits should reward stakeholders with returns.
When the ratio of a company’s debt to the ordinary shares of the company is high, it can kill the company’s choices in making business decisions.
But when the debt ratio is less, it shows that the company can take more risks without the doubt of reneging on its large debt load leading to its downfall.
Examine Price Earnings Multiple.
What is the Price Earnings Multiple? The price earnings multiple is the ratio for valuing a company that measures its current share price relative to its earnings per share (EPS).
It is used by investors to know the relative value of a company’s share in a reasonable comparison. It can also be used to compare aggregate markets against one another or over a period of time.
A high P/E ratio could mean that a company’s stock is overvalued, or else that investors are expecting high growth rates in the future.
Companies that have no earnings or that are losing money do not have a P/E ratio because there is nothing to put in the denominator.
Note; Your study can fail at last too because no one knows what the future holds for us all. Trust in God and do your part and everything will work in your favor.
And if you want pure experience, start at what you understand about investment so far and grow with it.
I hope this piece also helps you know your stand in the investment industry.
If you want to know the types of investment, click https://princenn.medium.com/the-top-three-most-relevant-investments-39f396a18a38.
If you want to invest, click https://princenn.medium.com/how-to-invest-in-2021-c47d91c66a08
Clap and follow if you want this investment journey.
