In our quest to make money in investing, we are always on the lookout for good stocks to invest in. For some people who know little about the financial world, stock investing is nothing more than gambling. I can’t agree more, especially if you’re placing your money blindly, because unlike gambling, you can certainly up your chances of making money in stocks. If you know how to look for signs, you could bag a lot of winning money from stocks.
Before buying some shares of a company, there are three fundamental things you should look at to see if the company that you are about to buy is a good buy. There are other fundamentals, but I’m highlighting the three easy basics.
A company with a consistent earnings growth and a great earnings growth projection is often a great buy. Profitable companies that always post improved revenues year-on-year rarely resort to other means of raising capital for their operations and planned expansions. Especially if the company reinvests its profits into its business, it would most likely rely less on selling bonds and offering new shares. With lesser outstanding shares in the market and with spectacular earnings growth, expect such company’s stock price to climb even higher.
You can obtain earnings information from your local bourse’s website where you can find company disclosures, or you can contact your broker for more information. You can also get on the phone with the public company’s investor relations officer who would be more than happy to disclose pertinent information.
If a company is a market pioneer and leader with very little to no competition and has a good command of its niche, say the budget air travel business, it’s probably a good stock buy. A niche company could command higher stock prices as they cater to a very specific group of loyal customers, and most especially, their industry has very few players to compete with.
Insiders are buying their stocks
Most often, when a publicly traded company’s officers and staff invest in their very own, it’s a good hint that its stock price could improve over time. Why is this so? It’s a sign of employee confidence that the company’s future is going to be bright and promising. They know their company better, so why shouldn’t you trust them?
These are just partial fundamentals to look for good stocks to invest in. It’s better to look for these signs and use your own judgment than to listen to market hype and fall flat on your face.
(This article was originally posted on CharlieSolanor.com)