Here is a Stock Market Tip Everyone Should Know About

Are you looking for a stock market tip? In this article I am going to give you a tip that everyone should know about.

This stock market tip is to – perform due diligence. What is due diligence? Basically it means researching a stock to see if it is worth buying. Here a ten steps to follow when performing due diligence.

1.) Market capitalization – find out the company’s market capitalization, doing this will help you figure out how volatile the stock will be, how broad the company’s ownership is and the potential size of the companies markets. Also find out what exchanges the stock trades on.

2.) Look over revenue, profit and margin trades - look up the revenue and income figures for the past three years. Look for trends in these figures such as whether growth is choppy or inconsistent or if there are any major swings. Also review the margins to see if they are rising, falling or remaining steady.

3.) Competition - what industry does the company operate in and how much competition is there. Compare your company to its closest three competitors.

4.) Company management - who is running the company? Look at the bios of company management, who are they and what kind of experience do they have. Also see if the company managers hold a large amount of company shares, high share ownership by managers is a good sign

5.) Check the balance sheet - look up the company balance sheet, what is the overall level of assets and liabilities? Check to see how much cash the company has as well as how many outstanding debts are held

6.) Stock price history - how long have all classes of shares been trading? What is the long and short term price movement? Is the stock price smooth and steady or choppy and volatile? Answering these questions will give you a good idea of what the stock will do in the future.

7.) Level of risk - it is important to understand the levels of risk involved in the stock. Ask yourself if there are any future risks involved in owning this stock.

By following the above steps you will be able to get a good idea if your stock is worth investing in. If you enjoyed this stock market tip, if you