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 rumors, 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:
Is there a significant factor that is driving the business but which has not yet been discovered or appreciated by the Street?
Is there some kind of catalyst, which is expected to continue, that is creating economic value specifically for this company?
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?
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?
Does the company have an executive management team that is conscious of increasing shareholder value and is actually taking steps to achieve it?
Any company exhibiting all or most of the above considerations is worthy of the investor taking the next steps: (a) doing a thorough financial analysis; and (b) comparing the Subject Company to those it competes against in its industry.
------------------------------
Bob Weir, B. Comm, B.Sc., CFA. - eResearch
Mr. Weir has 43 years of investment research and analytical
experience in both the equity and fixed-income sectors, and in the
commercial real estate industry. He was at Dominion Bond Rating Service
(DBRS) from 1994 to 2001, latterly as Executive Vice-President
responsible for supervising the firm’s 34 analysts and conducting the
day-to-day management affairs of the company. He joined eResearch in 2004 and has been its President, CEO, and Managing Director, Research Services since May 2005.
