When an investor wants to make a decision about investing in stocks research and technical analysis becomes extremely important.
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Stock market research is not similar to researching for car shopping. You can make decisions based upon technical aspects.
Although there are a lot of parameters to consider when it comes to the stock market. Technically it is called fundamental analysis.
This analysis includes multiple factors such as leadership team and competition stock evaluation, etc
Stock Research And Technical Analysis:
Stock investment is although considered a bit risky investment RT securities does the best in terms of risk management. Precisely, you can say that you have to make decisions about ups and downs and long term gains in a timely manner. Generally, Stock investment is the investment amount which you will not need in a short run
There are 4 Critical Steps involved in a company’s evaluation before investing in its stocks.:
Step 1: Collect Stock Research Material:
First of all, start with the company financial report which is technically called quantitative research. It is based upon a few documents which are needed to file the U.S Securities and Exchange Commission.
Form 10-Q: This is actually a quarterly update on financial outcomes as well
As operations.
Form 10-K: This is also an annual report which contains financial statements
That is being independently audited. Its basic purpose is to review a
Company’s balance sheet, revenue expenses, cash handling, and sources of income.
Are you a busy businessman? Don’t worry.
We will extract financial data for you.
Our data will help you in knowing about highlights, financial ratios, Also you will be
Able to better visualize companies performance for investment
Step2: Keep Focus:
Generally, financial reports contain a lot of data which might not
be as useful all the time. So, keep your focus on the following parameters:
Revenue:
Revenue is the amount a company brought for a specific period.
This is the very first thing which you will see in the income statement.
Revenue is categorized as operating revenue and non-operating revenue.
Operating revenue is generated from companies’ core business whereas non-operating
One comes from one-time business activities.
Net Income:
It is listed usually at the end of the income statement. This is tactual money a company has earned after deducting taxes, operating expenses
And depreciation.
Earnings and Earnings per Share:
This number is obtained by dividing earnings by the number of shares available for trading. It reflects the company’s tendency to profit on a
Per-share basis. It is a very important factor when it comes to stock conversion.
Earnings is considered the most perfect parameter as it depicts how efficiently a company is using its capital. Some companies reinvest these Earnings and pay shareholders dividends.
Price Earnings Ratio (P/E):
This parameter is calculated by dividing the current stock price by its earnings per share over the last year. Also, you may calculate forward P/E by dividing the stock price by forecasted earnings
P/E is considered as typically a less reliable factor due to the short term approach.
Return on Assets(ROA) and Return on Equity(ROE):
ROE reflects the percentage of how much profit a company generates with respect to each invested shareholder dollar. This parameter reflects how much a company is efficient in generating profits.
Step 3: Qualitative Research:
If you want to know the true picture of the operations and prospects of a company then go for qualitative research. It is being said that if qualitative research depicts financial documented stories of a company then Technicolor
Is obtained from qualitative research.
Qualitative research includes a detailed analysis of the following Queries:
- What’s the earning source of the company?
- What’s the competitive edge of the company?
- How is their management team?
Step 4: Convert Your Research in a Meaningful Document:
As there are dozens of metrics that contribute to depict a company’s financial health and to have an idea about the future price of the Stock.
Context is the key to decide which company stock is fruitful to Invest. Use historical data to get an insight into company tough times. Now, look
at company numbers and key ratios. Also, you may use tools usually provided by
the company’s sites.
Still, have any questions about technical analysis and research? Contact us Today