Friday 8 June 2012

Evaluating Company Quality

To buy a good stock, you only need to know if the company is a good-quality company and if the price you have to pay for its stock is reasonable.

A good-quality company is one whose growth, upon which you rely to increase the value of your investment, is strong and stable, and one in which management's efficeincy will enable it to continue that satisfactory growth. 

The first assessment of a company's quality is the analysis of its sales and earnings growth.

As a company passes through its life cycle, its success and its potential as an investment can be sized up at a glance.

Companies that are good candidates are easy to spot.

More important, companies that are not good candidates are even easier to spot.

As you become more experienced, you'll be able to gain more insight into what is in store for a company and why.

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