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How to find good stock options

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how to find good stock options

NEW YORK TheStreet -- It may seem like a given that you should do your homework before plunking down your hard-earned cash on a company's stock -- but many people don't. The Effect of Attention and News on the Buying Behavior of Individual and Institutional Investors. As stock market crashes have taught us, a carefree investing style doesn't work forever. In fact, its success usually comes to an abrupt end. It would behoove investors to relearn that painful lesson before the next crash. With that in mind, here are 10 questions investors should ask -- and answer -- before buying a stock. Of course, knowing stock the answers doesn't guarantee a winning stock. Nothing can how that. This first basic question is a simple one, but that doesn't mean it's easy. To answer the question, how are plenty of places to look, including the company's Web site. Is the Company Profitable? This is also a simple question, which can be made more complicated by all sorts of variations on a company's earnings. Investors can read the quarterly and annual earnings reports to check out how much net income the company reported, in dollars and in per-share earnings. Later down in this column we'll address ways to mine for red good in earnings. There's a very good reason why so many clamor for these stocks. Even though this is a confusing time, investors should stop second-guessing the Fed, says Jim Cramer. What Does the Company Do? What Is the Company's Earnings History and Outlook? A quick scan of older news stories and the company's past quarterly statements help answer this question. Does the company have a history of steady earnings growth? Remember, all trees don't grow to find If the company is a maturing tech company, can it sustain the heady growth of its days as a spry, young growth company? How Richly Is the Company's Stock Valued? It's wonderful to find a company whose earnings are growing exponentially, but the other side of the equation is the value the market pays for that growth and the prospect of future growth. There are several basic methods of determining a company's valuation, including price to earnings and price to sales. Who Are the Company's Competitors? Companies don't options in a vacuum. Companies are constantly trying to take business from one another. Investors should know where their companies stack up: Does this company have the biggest market share in its industry? Is it a small but growing niche player in a competitive industry? Also, investors should increasingly pay attention to foreign competition, where lower-cost competition can put find on profit margins. Who Runs the Company? However, that doesn't mean there aren't plenty of ways to find out about the leadership. Any company worth its salt will have a Web site that lists the senior managers, how long they have been with the company, their background and the company's history. If the company's executive suite has a rotating door, that may not reflect positively on the company's stability. Beyond the company line on the executive stock, investors should research articles about the executives. Often, trade publications from any given industry are useful in digging into a company. How Clean Is the Company's Balance Sheet? Serious-minded long-term investors need to be able to read over a company's balance sheet. Is the company saddled with a huge amount of debt compared with how much it earns? Checking out a company's earnings alone doesn't tell you if the company has borrowed to the moon to achieve those earnings. It's also useful to see how much the company is spending on research and development and how large its inventory levels are. If they are growing from last year, that may mean business is slowing down. This brings us to question No. Have You Read the Company's K and Q Annual Reports? The K report is the annual report every company is required to file to the Securities and Exchange Commission. The Q is the quarterly report -- similar to the K report except that it is required on a quarterly basis. Are There Any Red Flags That Call Into Question the Company's Integrity? This is where the Q and K filings come in handy. First off, every company needs to detail the risk factors that may undermine its prospects. Second, the explanations of the company's accounting practices and operating assumptions stock matters ranging how depreciation rates on its assets to assumed rate of growth for its pensions tell you a great deal about whether the company is getting too aggressive. Is the Company's Competitive Position Sustainable? Run-and-gun investors looking for short-term gains might not need to answer this question, but serious-minded long-term investors do. Action Alerts PLUS is a registered trademark of TheStreet, Inc. You are using an outdated browser. Please upgrade your browser to improve your experience. Jim Cramer's Best Stocks for Most Recent Trade Alert. Options Access insights and guidance from our Wall Street pros. Find the product that's right for you. Aug 27, 1: Prev 0 of 4 Next. Jun 16, Let's Remember Why We Like Tech Find a very good reason why so many clamor for these stocks. Jun 15, 5: Coca-Cola Is Seeing a Remarkable Turnaround, Explains Good Cramer Here's what you need to know. Jun 15, 9: Fed Is a Paragon of Predictability: Jun 15, 6: What They Export, Whom They Employ. Amazon Could Take Down Walmart With One Whole Foods Brand. McDonald's Joins 5 Other Mega Brands In Ditching the Olympics. Walgreens, Rite Aid Deal Saga Is Headed Into Its Final Hours. 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Trading Tip: The Secret Power Of Stock Options

Trading Tip: The Secret Power Of Stock Options how to find good stock options

3 thoughts on “How to find good stock options”

  1. ÎêÅàÍ says:

    In her anxiety about her husband the wife had not been able to sleep.

  2. Alext34 says:

    But according to MM only the neural events that lead me to believe I see the red patch exist.

  3. alrogo says:

    But something that I find worthy of astonishment is about to present itself.

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