9:29 | 30.11.2009
eResearch Weekly Clarion: Topic -Due Diligence
It is of the utmost importance for an Investor to do his or her own research on investment ideas. Too many times a stock tip is based on rumours, lies, or whispers, and not on fundamentals. Do your own research, analyze companies thoroughly, and make your own judgment, even if it is against the consensus.
What does that entail?: “Do your own research”.
As part of prior-investment due diligence, the following are useful parameters to consider:
(1) Is there a significant factor that is driving the business but which has not
yet been discovered or appreciated by the Street?
(2) Is there some kind of catalyst, which is expected to continue, that is
creating economic value specifically for this company?
(3) Is the company operating in an industry that is growing while, at the
same time, is the company gaining market share, and will this advantage
continue?
(4) Is the product that the company manufactures or the service that the
company provides widely popular with the public or a major sector of
the public?
(5) Does the company have an executive management team that is conscious
of increasing shareholder value and is actually taking steps to achieve it?
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