Forget Screeners and Hot Tips: Here's How I Actually Research a Stock Using Fundamentals That Matter
Business quality and growth should surpass all else when analyzing stocks.
Overview
Many investors will buy a stock simply because someone told them to, without understanding how a business works. Others will simply buy because it has a low valuation multiple, such as the price-to-earnings ratio (P/E).
Both these strategies are a recipe for disappointing results. When looking for stocks to buy and hold for a decade or longer, there are fundamentals that matter much more than others.
Details
Here is how I research a stock from scratch, utilizing three metrics -- revenue growth, business quality, and management -- to assess whether it is a business worth betting on.
Source
Originally published at www.fool.com.
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Disclaimer: This article is for informational purposes only and does not constitute investment advice. Data may be delayed up to 15 minutes. Past performance is not indicative of future results. Consult a licensed financial advisor before making investment decisions.