| Stock comparator | Checklist before buying a stock | |||||||||||||||||||||||||||||||
| Red-marked answers are negative factors in stock buying decisions. | ||
| NoYes | Q: | Does the ticker symbol represent the company's stock ? Some company names are similar, so you may end up buying the wrong company's stock. Many websites display the company's name is abbreviated form, adding to the confusion. Also, some companies issue preferred stocks, notes or multiple classes of stocks. You need to ensure that you're buying the shares that you really intended to buy. |
| NoYes | Q: | Is the company in or near bankrupcy ? (for NASDAQ, fifth letter Q indicates company in bankrupcy) |
| NoYes | Q: | Is the company involved in a merger or major acquisition, or is being broken up (making past financials obsolete) ?
During the last year, did the company split into multiple companies, or did it do a significant spinoff, so that the old name and ticker represent now only a part of the operations compared to a year ago? |
| NoYes | Q: | Are the latest quarterly results in the database ? See 'Q end' column in comparison results and 'Company Details' page. If more than 3 months and a week passed since the end of the 'Q end' month, then the company may have issued an earnings announcement. If more than 4 months passed, then the company probably filed the lastest quarterly report with the SEC, and the stock-comparator database will be updated shortly. |
| NoYes | Q: | Is the company majority owned by a single individual or a
private company, or is a subsidiary of such company, or such an entity is holding a "golden share" in the company ?
Such a structure may interfere with market valuation of the company. Note: this doesn't apply to companies that are majority owned by a government. |
| NoYes | Q: | Is the Yield too high because of a spinoff or special dividend, or did the company hint that future dividends may be lower ?
Or did the company report a significant deterioration in business ? Use the direct EDGAR link on the Company details page (subscribers only) to read the 10-Q / 10-A or equivalent forms, or use EDGAR search. In the "Company details" page, compare the latest quarterly revenue and profit to the yearly (ttm) values, to see if they are below average for a quarter. |
| NoYes | Q: | Are there major negative news items about the company (or industry) newer then the quarterly report in the
database ('Q end') ?
For example, company warning that quarterly or annual income or EPS will go down, new litigation or major product recall or withdrawal. Look for news about declining demand for the company's or industry's products or services, or a supply glut, or appearance of new competitors. Use the EDGAR link on the Company details page (subscribers only) to browse the latest SEC filings by the company, and search for the word lawsuit. Note that it's normal for a large company to have some lawsuits pending. Do the same in the Yahoo! message board (link by clicking on the ticker symbol in the Company Details page. |
| NoYes | Q: | Does the yield appear in red?
This means that the company is paying dividends although it's loosing money, or that the dividend is more than 90% of the EPS, indicating possible unwise use of company profits. |
| NoYes | Q: | Is the salary (including options exercised) of any of the executives excessive ? |
| NoYes | Q: | Is the company issuing new stock or warrants, or did so since the last quarterly results ? |
| NoYes | Q: | Is the company late in filing SEC reports (Red '*' near symbol in comparison results and/or fifth letter E) ? |
| NoYes | Q: | Is the stock about to be de-listed from the exchange where it's currently listed due to low price (fifth letter C) ? |
| NoYes | Q: | Is the stock's r(DJI) high and the market has been going up for the last few days ? |
| NoYes | Q: | Is the stock's r(DJI) negative and the market has been going down for the last few days ? |
| NoYes | Q: | Does the company carry a high debt load ? (may be acceptable for brokerages / financial companies) |
| NoYes | Q: | Is the company's quarterly profit and revenue x 4 greater than the corresponding TTM values ? |
| NoYes | Q: | Are the company's main operations in a declining industry ? |
| NoYes | Q: | Are the company's main operations in a particularly competitive industry ? |
| NoYes | Q: | Does the company have a monopolistic position in some of its products ? |
| NoYes | Q: | Does the company have a lot of cash AND is profitable ? |
| NoYes | Q: | Is the stock dividend sustainable based on recent profits ? |
| NoYes | Q: | Are you overweighted in this industry or stock (i.e over x% of portfolio) ? |
| NoYes | Q: | Do you have good knowledge of the company's business, such as its products,
its industry,
management, marketing, manufacturing, history, employee quality and morale ?
In this case, you have an advantage over other investors and analysts. |
| NoYes | Q: | For foreign-based companies, do you have good knowledge of local conditions
and the country's geo-political situation ? You can use such knowledge as contrarian opinion to the accepted view. |
| NoYes | Q: | Did the stock have sharp downward movements lately ? Sharp moves without supporting solid news may be a buying opportunity |
| NoYes | Q: | Are there any contrarian reasons for buying the stock ?
(Such as buying shipping and airline stocks when oil price is high, or had recent unjustified sharp price drop.) |
| NoYes | Q: | Do you expect upward movement in the company's product prices due to: new products, higher demand, or industry-specific events (e.g higher commodity prices, lower interest rates). |
| NoYes | Q: | Is the stock recommended by your favorite analyst or newspaper or website ? Use extreme caution when relying on this factor! |
| NoYes | Q: | Stock has price, revenue or earnings momentum. Use extreme caution when relying on this factor! |