If you want to invest in a single stock, it’s risky, we have been through the points of why, but I must admit, it is hard to not buy when you think a good opportunity has presented itself. Whilst we encourage safer investment strategies if you do have the urge to buy a single share, speak to a financial advisor and also do your own research.
When I was in University, I learnt a lot of different metrics to be able to evaluate a company, as a rule, I will generally look at 10 key metric categories for any company I will consider buying, these can be summarised as follows:
- Revenue and Profit Margins: Understanding a company’s financial health and growth potential by analysing its revenue and profit margins over time.
- Market Share: Understanding a company’s position within its industry and the competitive landscape to assess its ability to compete and its potential for growth.
- Management Structure and Board of Directors: Assessing a company’s leadership and governance practices, as well as gaining insight into its strategic direction and decision-making processes.
- Product and Service Offerings: Analysing a company’s competitive advantages and growth potential by understanding its product and service offerings.
- Competition and Industry Trends: Staying informed about the company’s competitors and industry trends to assess the company’s ability to adapt and grow in a changing landscape.
- Financial Ratios (e.g. P/E Ratio, Debt-to-Equity Ratio): Understanding a company’s financial position and performance by analysing financial ratios.
- Employee Benefits and Retention Rates: Assessing a company’s ability to attract and retain talent, as well as its corporate culture and values.
- Marketing and Advertising Strategies: Understanding a company’s marketing and advertising strategies to assess its ability to promote its products and services and attract customers.
- Legal and Regulatory Issues: Staying informed about any legal or regulatory issues the company may face, as well as its compliance with laws and regulations.
- Future Plans and Growth Strategies: Understanding a company’s future plans and growth strategies to assess its potential for long-term success and growth.
When I learnt about these categories, the next thing I struggled with was where to find this information. In this scenario, the internet is your friend, as retail investors, we do not have access to fancy databases such as Bloomberg, but we can get great information from publicly available sources, or newspapers (which are increasingly hiding behind paywalls, making it a bit more difficult).
Below is a table, that helps you to think about the sources to find information for the US, UK, Europe and Asia, similar website can be used to find information in other regions, but this is a good starting point. As a rule, government websites, such as those of regulators are your friends and be wary of social media sites are your primary source of information.
| Information | Source (US) | Source (UK) | Source (Europe) | Source (Asia) |
|---|---|---|---|---|
| Revenue and Profit Margins | Company’s Annual Reports, SEC Filings | Companies House, Financial Reporting Council | Eurostat, National statistical agencies (e.g. Destatis in Germany, INSEE in France) | Company’s Annual Reports, Stock exchange filings |
| Market Share | Industry reports, Market research firms | Companies House, Office for National Statistics | Eurostat, National statistical agencies, Market research firms (e.g. Euromonitor, IBISWorld) | Industry reports, Market research firms (e.g. Frost & Sullivan, Technavio) |
| Management Structure and Board of Directors | Company’s Annual Reports, SEC Filings, Company’s website | Companies House, Financial Reporting Council | National regulatory bodies (e.g. Autorité des marchés financiers in France, BaFin in Germany), Company’s Annual Reports | National regulatory bodies (e.g. Securities and Exchange Board of India, Monetary Authority of Singapore), Company’s Annual Reports |
| Product and Service Offerings | Company’s website, Annual Reports, Investor presentations | Companies House, Business directories | Trade publications (e.g. Food Navigator, Utility Week), Industry associations (e.g. Confederation of British Industry) | Company’s website, Annual Reports, Industry associations (e.g. Federation of Indian Chambers of Commerce and Industry) |
| Competition and Industry Trends | Industry reports, Market research firms, News articles | Office for National Statistics, Market research firms | Eurostat, National statistical agencies, Industry associations (e.g. European Chemical Industry Council), News outlets (e.g. Reuters, BBC News) | Industry reports, Market research firms (e.g. Frost & Sullivan, Technavio), News outlets (e.g. Nikkei Asia, South China Morning Post) |
| Financial Ratios (e.g. P/E Ratio, Debt-to-Equity Ratio) | Company’s Annual Reports, SEC Filings, Financial news websites (e.g. Yahoo Finance, Google Finance) | Companies House, Financial Reporting Council, Financial news websites (e.g. Financial Times, The Guardian) | National stock exchange filings (e.g. Euronext filings), National regulatory bodies, Financial news websites (e.g. Bloomberg, Reuters) | National stock exchange filings, National regulatory bodies, Financial news websites (e.g. Nikkei Asia, The Economic Times) |
| Employee Benefits and Retention Rates | Company’s website, Employee reviews websites (e.g. Glassdoor, Indeed) | Office for National Statistics, Companies House | National statistical agencies, Company’s Annual Reports, Industry associations (e.g. Confederation of British Industry) | Company’s Annual Reports, Industry associations (e.g. Federation of Indian Chambers of Commerce and Industry), Employee reviews websites (e.g. Glassdoor, Indeed) |
| Marketing and Advertising Strategies | Company’s website, Industry reports, News articles | Market research firms (e.g. Mintel, Euromonitor), Advertising Standards Authority | Trade publications (e.g. Campaign, Adweek), Industry associations (e.g. European Association of Communications Agencies) | Industry reports, Market research firms (e.g. Frost & Sullivan, Technavio), Advertising agencies (e.g. Dentsu, WPP) |
| Legal and Regulatory Issues | SEC Filings, News articles, Company’s Annual Reports | Companies House, Financial Reporting Council, News articles | National regulatory bodies, Industry associations (e.g. Confederation of British Industry), News outlets (e |
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