Paul Allison

5 days ago9 mins

How To Analyze A Stock In Five Easy Steps

How To Analyze A Stock In Five Easy Steps

Paul Allison

5 days ago9 mins

How To Analyze A Stock In Five Easy Steps
  • Follow each of these five steps and you’ll have covered all the stock research essentials.

  • You can go a mile deep on each of these points, but a firm’s historical performance is a good starting point.

  • This framework can be applied to any firm, so it’s really all you’ll need.

Follow each of these five steps and you’ll have covered all the stock research essentials.

You can go a mile deep on each of these points, but a firm’s historical performance is a good starting point.

This framework can be applied to any firm, so it’s really all you’ll need.

Researching stocks can be an endless task. There’s an infinite amount of information out there from an unlimited number of sources. So over the years, I’ve honed a five-step framework for analyzing a stock, with built-in stopping points that allow me to pause and dive deeper or carry on. It’s simple enough that anyone can use it, and it delivers results that are good enough for the pros. Here’s how it works, using Apple as an example…

Step 1: Take a look at its sales growth profile.

Everything starts with sales growth. There’s no profit, cash, or dividends without sales, so it’s hands down the most important aspect of any analysis. To gain an understanding of the long-term direction of future sales growth, you want to start with the firm's track record. I like to go back at least ten y

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