Company research checklist
Before investing in a company I like to do at the very least some rudimentary research around the stock performance, company, and its future prospects. It sounds silly to say it, but you would be surprised how many people I encounter that don’t know even the basics around the company behind their investment.
It’s hard to hold onto a great company stock when the bad news hits and you don’t have the information about it beyond the very basics.
Here is how I go about it. I maintain a checklist that I go over. It contains questions or tasks to do and while doing them I start pulling information and building a picture of the company.
It’s amazing where this list can take me and how much I learn doing this. Here is the checklist:
Fundamentals
- cash on hand
- revenue, revenue growth
- debt
- market cap
- is it owned/recommended by people/sources I follow
- institutional ownership
- Twitter holders/chatter
- how did it do past earnings
- when are its next earnings
- do I use it? do I understand it?
- how long has it been around
- management overview
- Wikipedia entry
- gather at least one article describing the company — do you agree/not agree?
- news articles search — any negative news?
- social media mentions by users of the product
- google trends
- industry discussion
- is it a leader in its space
- competitors
- is stock volatile
- % short interest
- read recent quarterly reports
- read annual report
Moat discussion
Risks as I see it discussion
Chart questions
- general price trend
- daily chart
- weekly chart
- monthly chart
- what is volume doing
- daily volume above 0.5M
What questions do I still have about this company
Through it all — take notes
—
That’s the list in its current form. For each bullet point, I put the actual notes/discussion points and then keep on filling these out one by one.
What’s interesting is how this seemingly linear checklist becomes a very non-linear exploration exercise that can take you to places you did not consider. It’s a great starting point that bootstraps the exploration, but then after that, the process takes on its own path.
My favorite part is the management research. Just seeing the founder's histories, their path, their interests, interviews, and accomplishments can be inspiring as well as very informative.
Also, it seems like each time I do this, the discovery of information leads to more questions and more bullet points.
