One of the most popular
forms of investing is buying stock in a company. Shares of
stock represent sharing ownership of the company that issues
the stock.
Stock is important to the
investors because it allows them to participate in the success
of companies, and it is important to the companies because it
allows them to raise the capital they need to grow and
compete.
Buying stock in a company
can be an exciting and profitable experience. If the company
does well, the value of the stock will go up, and at the end of
the year it will distribute its profit among the
shareholders.
Of course, there is risk
involved. If the company does poorly, the value of the stock
can go down, or it can lose its value altogether. Then the
investors lose all of their money.
Knowing which stocks to
buy is the secret of a successful investor. But with thousands
of companies offering stock on the major stock exchanges, how
can we know which are good invesments? Most experts say to
start with a company you know about, one which produces goods
or services you use. Beliving in a product is not enough to
risk your life's savings, but it's a good place to
start.
To begin the process of
establishing your Portfolio, think of the names of five
companies you have heard of or know, which you think could be
good companies to invest in. Remember, this is just the
preliminary investigation. You may decide some of these
companies are not worth investing in now. Just pick companies
that look interesting.
5th Company
Evaluating
the Companies
How can we tell if these
companies' stock is a good investment? There is certain basic
information that is essential in determining how much profit
potential a stock has, and how much risk. According to these
two evaluations, most investors decide which stocks to
buy.
In your in-class
discussions you should have discussed some of the factors in
determining the business health of a company. Here are some of
the most important. Using the links that follow, find as much
information as you can about each company. Don't worry if you
can't find everything for each company.
Sample
Company Report
Full name of the
company:
Field or type of
company:
Location of
headquarters:
Stock
symbol: Exchange:
Current price:one
share: Price
one year ago:
52 Week
high: 52 Week
low:
Latest
dividend: %
Change
Sales last
year: % Change
Profits last
year: %
Change
Price/earning
ratio:
Who is the CEO of this
company:
What other companies has he
led:
What industry is this company in and what
products or services does it
provide?:
Who are this companies' main
competitors:
Collecting Information
Now that we've decided what are the
important factors, where can we find the information we need to
evaluate each company?
Try some of the following links.
Start with the Lycos stock-finder to
discover the ticker symbol for each company's stock:
Yahoo
Stock Symbol Lookup
Next, check out these
sites for up-to-date information on stock
performance:
Hoovers
Company Reports An excellent
source of company profiles. More detailed information available
to members..
Yahoo Quote -
A quick and easy way to get basic financial information about
any company once you know the stock symbol.
MarketWatch
- Stock quotes and
Company Profiles
MoneyChimp
- stocks and investing explained
Finally, a few extra resources for
background data
Charles
Schawb - a great Stock Analyzer with all the information you need
to analyze a stock
Company
Homepages -
links to the homepages of most major US companies
Motley
Crew -
Unconventional advice for the unconventional investor. Check
out the lessons in investing.
Creating a
Stock Portfolio
Coming Soon