6 Answers: When investing in a company what should I look for?
Question
I am beginning to invest in companies for the first time and so am looking for ways to tell if a company is a good one to invest money with.
There are many tools and strategies out there and I would like to know what worked best for you to pick winning companies?
If you are an investor who has experience in finding companies that are good for investing in then do please reply to me or send me a private message.
There must be ways to work out if the company I am looking to invest in is a good one for long term profits.
in progress
1
Investment Analysis
4 years
6 Answers
881 views
0
Answers ( 6 )
One of the key things to look for when investing in a company is does that company have a strong moat – or competitive advantage – over the competitors in the same market or sector?
For example look at Nike as compared to Under Armour. Both have quality products but Nike can routinely sell at a premium price as compared to Under Armour because their brand name alone is a HUGE competitive advantage.
So investing in companies that have good brand names, or other competitive advantages that create a moat around them is a good thing to look for.
I like to look for and find a good management and board of directors who know how to deploy capital and generate a good return per share. If the management team cannot, or will not for whatever the reason may be, generate could return on investment for your money invested in the shares of the company, then you have no business investing in them.
Good management team.
For me it is far more about what the company can do long term because if you can predict the way a company will grow, or otherwise, then you can invest with that knowledge.
For example I was just reading another question and answers about artificial intelligence and how that will change how companies do in the future AND IT IS VERY TRUE.
If there are new technologies coming into the market, how will your chosen company deal with this? Are they early adopters? Or are they going to be put out of business because they could not keep up with the times?
Also, are there brand new companies trading for just a couple of dollars which will be the next Amazon, Google, etc
Look for a company that can get a good return on the money you put into it.
Yep. You said it. Find companies who can actually put your money to work investing it for a good return which will increase share price and pay handsome dividends.
Start by looking in the right sector,. Perhaps the entire industry will no longer exist in 5 years? Maybe the new industry is going to over take.
Energy is a place for example where lots of change will happen,.