Again, this post is to address few similar inquiries related to how I do stock analysis.
As I shared before, I usually take 4 to 5 working hours to do thorough analysis, where I have to key in 10 years of financial data for a new company. But, 4 to 5 hours is very precious to me.
So, before I start to do thorough analysis, I will perform a preliminary research as following:
- A quick check on nature of business, industry, growth drivers and risks of the company. If I interested to know more about this company, I will do the second step; otherwise, I will skip the company.
- A quick and dirty check on financial strength like following. I have a worksheet for me to key in some important financial figures, then the worksheet will do a quick calculation for some important ratios. I will also check trend of some figures here. If I find something suspicious, I will do a double check and verification.
If I satisfy with the preliminary results, then I will go ahead to do thorough analysis. Usually, I can finish a preliminary research within 30-45 minutes.
So far, I have performed preliminary research on 461 companies. I do not share my preliminary research because I have time constraints.