what characteristics do you look for when choosing a stock to buy?

Question

generaly, when buying shares in a company, what are some classic sings it may steady incline for the next several years?
what are some common sings that a stock may not be worth the time?
what are some indications that particular companys may be on the up and up while others fall at the wayside?

Thanks so much + 10 points to the best.

Answer 1

The CEO is not awaiting sentencing.

Answer 2

First, you should be a little familiar with the business of the company...what do they do or sell..
Then how have they been doing?(charts) nice, steady uptrend...
Then...do you know, have you read, is their something in the news that will NOW change this company's outlook for the future...is everybody buying " gizmos" all of a sudden? has a competitor put out a bad "'gosmo" ? did the price of raw materials for making " gizmos" go up or down? are they all of a sudden advertising on primetime instead pf 3 A.M.?
... or better than uptrends...do people NEED your "gizmo"? is there a world shortage of them? or a bigger demand?( energy, materials, crops, water, armor, flat-glass,chips, plastics, )
Then you get to comparing companies in the same business by P/E, year over year earnings, number of outlets, boats, towers, (whatever it takes to give your guy the edge)
You can usually predict some upswings and make some money,the real hard part is knowing when to back off a little ( or a lot) to keep some of that money.Then it's back to research, eyes and ears open....
Then again, some investors, rather than riding twelve different stocks up and down buying and selling, just prefer to invest in absolute necessities, large diverse companies, and the best dividends.Those people sleep better.
As far as companies going up while some fall behind....it's usually not permanent, there's always fluctuations...and two years down the road the laggards are neck and neck with the leaders......AMD was killing Intel for awhile now all of a sudden they're falling apart... Dell was king of the hill a couple of years back....for awhile you couldn't get a quarter for corn and natural gas was $ 15.00 ...complete reversals.
So you play it either way...trading with the fluctuations....or sit back, hold the big safe necessity guys.....and choose your stocks accordingly.

Answer 3

for an experienced investor like me, your question is not easily answered. you need to understand balance sheets, IS, and Cash Flows...and how they relate to eachother and to the thousands of other companies out there. i focus on beaten up companies with excellent financials and high return on capital which are selling at a discount to peers. this works tremendously but it has been many years of hard work in the industry to get there. to avoid catastrophes...which is a big key to long term investing health...DO NOT buy the latest and greatest because they are usually priced to perfection and fall the hardest. good luck

Answer 4

For me, purebred canines have breed features that are extra predictable. I knew the place to look from years of involvement and coaching. I even have participated in dogs activities and found out from journey over years, no longer over night. so a procedures as being careful of a few breeders...just to call some issues for the amateur shopper to run faraway from: i might circumvent information superhighway sellers, breeders who can't answer questions, grant shown archives on the sire and the dam, written ensures on the clutter and be careful of the breeders who can't even spell the breed they are merchandising. Craigs record is yet another crap shoot. i might advise no longer assembly any breeder on a McDonald's parking zone and paying funds for a "registered" pup. it is done so generally with uneducated puppy proprietors. What the he will are they thinking?

Answer 5

I like to pay attention to dividends, current market share, and past growth. An amateur investor for sure, I usually invest in companies whose products I like to use.

Answer 6

I look at the forward p/e ratio, cyclical environment, cash reserves, takeover possibilities, technical analysis and i HAVE to like the company.

Answer 7

look at their history see the market they are selling to see if the product is selling and most of all look at all the numbers carefully

Answer 8

Here are 10 good tips from msn: http://articles.moneycentral.msn.com/Investing/SimpleStrategies/10InvestingTipsToBalanceFearAndGreed.aspx