How To Research Stocks On Your Own

There are many people who are keen on investing in the stock market, but who are not necessarily confident, or comfortable about making those all-important investment decisions. No matter what level of investment, large or small, it’s important to know something about what you’re putting your money into. So, if you are an investor and are prepared to be self-reliant, then you need to think about how to research stocks and basically become your own stock analyst. This article is aimed at giving the less experienced investor a helping hand in terms of providing some useful guidance on to how to research stocks on your own.

Where Is The Information?

The first step is to begin thinking like an analyst – develop an enquiring mind. You need to find out what to buy or sell and at what price. Analysts usually focus on one particular industry or sector. If it’s a sector then they’ll focus on certain companies. An analyst’s aim is to probe into the businesses of the companies on their list. They do this by analysing financial reports and as much other available information as possible about the company. To cross-check the facts, analysts also dig into the dealings between the company and its suppliers, customers and competitors. Some analysts also visit the company, engaging with its management in order to gain a first-hand understanding of the workings of the company, and so over time they connect all the pieces of information together to get the full picture.

Before making any investment, you should do your own research. It is always better to research several stocks in the same industry so that you have a comparative analysis. However, the biggest constraint in doing your own research will probably be time. Retail investors who have many other things to do may not be able to devote as much time to research as professional analysts. However, you can surely take up just one or two firms in the beginning and test how well you can analyze them. That would help you in understanding the process and with further experience and time, you can add more stocks for analysis into your portfolio.

Can Analysts Help?

Getting your hands on anlaysts’ research reports can be a great way to start your own analysis. That way, you save a lot of time and learn much about your selected company simply by reading these reports. You may not necessarily want to follow their sell or buy recommendations, but you can get a great overview of the company, including its strengths and weaknesses, main competitors, industry outlook and future prospects. Analysts’ reports are loaded with information, and reading reports by different analysts simultaneously would help you in identifying a common thread. Opinions may differ, but basic facts in all reports are usually very common.

In addition it would be wise to take a close look at various analysts’ earnings forecasts, which ultimately determine their buy or sell recommendations. Different analysts may set different target prices for the same stock. Always look for the reasons while reading analysts’ reports. What would have been your opinion about the present stock, given the same information? No clue? Then move on to the next step.

What To Look For?

Let’s take the analysts approach in learning how to research stocks on your own. Firstly, try to understand the various steps involved in analysing a stock. Some analysts follow a “top-down” strategy, starting with an industry and then locating a well-performing company, while others take a “bottom-up” approach, starting with a particular company and then learning about the outlook for the industry. Either way is good, but try to take account to the following:

analyze the industry – there are publicly available sources of information for pretty much any industry. Often, the annual report of a company will give a good overview of the industry, along with its future growth outlook. Annual reports will often also provide information about the company’s competitors in their industry. Simultaneously reading the annual reports of two or three companies should give a clearer picture. You can also subscribe to trade magazines and websites that cater to a particular industry for monitoring the latest industry happenings;

business model – take a look at the company’s strengths and weaknesses. Is it a strong company in a weak industry, or weak company in a strong industry? The strengths of a company are often reflected in things such as its unique brand, products, customers and suppliers. You can learn about a company’s business model from its annual report, trade magazines and websites too;

financial strength – this is arguably the most important element of all when analyzing a company. You need to take a look at a company’s balance sheet, income statement and cash flow statements. Often, the numbers in the financial statements offer more information than the words in the annual report. In case you are not comfortable with numbers, no need to hesitate, just start learning as early as possible;

management – have you ever heard the expression there are no good or bad companies, only good or bad managers? Senior executives are responsible for the management and future of any company, so assess company management and board quality by doing some research on the internet;

growth outlook – it’s well-known that stock prices track earnings, the higher the earnings then, typically, the higher the stock price. Try to find out what you can about where future earnings are predicted to be. This is not too easy and analysts tend to make their own estimates by looking at past figures of sales growth and profit margins, along with profitability trends in that particular industry. It’s basically connecting what has happened in the past to what’s expected to happen in the future. Making accurate enough earnings forecasts is the ultimate test of your stock analysis capabilities, because it’s a good indication of how well you understand those industries and companies;

valuation – if you are able to establish indications about future earnings, the next step is to know about the value, or worth of a company. Analysts need to find out how much the current market price of the stocks is justified relative to the company’s value. There is no “correct” value and different analysts will use different parameters. For example, “value” investors look at intrinsic worth, whereas “growth” investors look at future earnings potential;

target price – try to establish a target price. Once you have established future earnings potential, calculate high and low target prices by multiplying estimated earnings per share (EPS) with the estimated high and low P/E Ratio. The high and low target prices represent the price band within which the future stock price is likely to move in response to the expected future earnings.

Finally

A lot of what is outlined above is really useful in showing you how to research stocks on your own. Ultimately you want to make a profit, and one of the best ways to give yourself the best chance of doing that, and avoid paying someone else to do it for you, is to do your own research. It can be fun, interesting and will certainly increase your understanding not only of the stock market more generally, but also, of those particular stocks and companies that you have an interest in.

What Does a Product Manager Do?

The role of a product manager tends to vary heavily depending on product lifecycle and stage of the company. Due to this variability, there is a wide range of day-to-day activities, but ultimately a product manager is still responsible for doing whatever it takes to collaborate with multiple teams and move different conversations towards closure. Many product managers state that the skill of empathy is one of the most important for a product manager as you need to be able to understand everyone’s motives and make sure that you are collaborating and persuading people to support your decisions.

To provide an example of what I do on a daily basis, below is an agenda of a typical day:

8:30AM: Wake up and check major tech blogs (I work as a PM in the gaming industry) and general news to make sure I’m up to date with the competition and market. Check my Google Doc PM Task List and add/edit any items I need to complete for the day. If I have extra time, I’ll try to complete at least 20-30 minutes of any online course I happen to be taking at the time. It’s important for me to be constantly learning a subject I’m not familiar with to make sure I’m personally growing. I try my best to avoid e-mail until I get into the office or else I end up just spending my valuable morning time responding or cleaning up my inbox.

9:30AM: Head into the office and grab some quick breakfast before getting ready for the daily morning standup with my dev team.

10:00AM: Every day, we run a daily 15 minute team standup, which is generally a standard part of the agile development process. In this meeting, we have a dedicated Project Manager who runs each session and asks 3 key questions 1) What did you work on yesterday? 2) What will you be working on today? 3) Are there any problems hindering you from completing your work?

10:15AM-1:00PM: This work chunk is generally divided by e-mails, quick meetings, and KPI updates. One of the first things I do is update all of my KPI dashboards to make sure metrics aren’t out of whack and everything is running smoothly. Right now, I’m on a fairly new product and a lot of my meetings revolve around discussions for new core features that I help to scope out as well as prioritize in our ever growing product roadmap. We’re rushing to do a global launch on the Android platform so it’s imperative that we shift around all features that can wait until later builds.

1:00PM-1:30PM: Grab a quick lunch with co-workers and generally just hang out. I’m fortunate that my co-workers are also really good friends and we all get along really well.

1:30PM-4:00PM: I spend some time sitting with our sales team (in gaming we call them a live-operations team that handles events and sales within our games) to discuss a new admin tool that our sales team wants our dev team to build. I sync up with the engineering manager to briefly discuss technical requirements and then spend some time wireframing (in PPT, we don’t use anything fancy like Balsamiq) the tool and passing it along to the engineering manager who gets the right dev member to start working on the tool. I also spend a lot of time pulling data to run ad-hoc analyses on recent features that went live as well as dig into why our acquisition rate has been slowly dropping recently.

4:00PM-5:30PM: Meet with Product Marketing to get a sense of what our recent yields have been looking like and to decide whether or not we want to start ramping up marketing spend. We’ve been worried about rising CPI (Cost per Install) lately and wanted to test various ad creatives to see if split testing various ads might lead to lower user acquisition costs. Ultimately, we decide we want to hold off ramping marketing spend for awhile until we can isolate the source of lower yields recently (could be product, market, or marketing related).

5:30PM-6:00PM: Drink with the co-workers in the office and hang out for awhile before heading home for the day.

Although the list above is just one sample day in the life of a product manager, there are definitely set responsibilities that a product manager is always trying to find time to do:

Strategy Planning – As a PM, I always keep a tab of short/mid/long term product feature ideas and it’s extremely important to always be thinking about whether or not these ideas make sense given recent market changes or data analyses that you’ve performed.

Project Management – A good PM is very organized with gathering information from various teams and properly summarizing/documenting the most important information to be shared with appropriate stakeholders. For example, I need to maintain a clean product roadmap with estimated completion times and release dates not just for myself, but also to share with product marketing so that they have a heads up to when they should start working on new campaigns or ad creatives.

Data Analysis – Data is crucial to making well-informed product decisions so PMs should be able to understand and hopefully pull the data they need to run analyses. Learning SQL and Excel are a must to run basic data analysis on the job.

User Testing – It’s imperative to find time to sit down or at least speak with your users so that you can understand their problems and get feedback on what you can improve or create.

What Sort of Career Centers on Research and Development?

The progress of a company or business relies upon the research and development that comes from employees constantly looking for better approaches concerning issues like management, growth, expansion, and cost-efficiency. If seeking ways to improve a business interests you, it is recommended to consider some of the occupations listed below:

Clinical Research Coordinator

A Clinical Research Coordinator is in charge of the organization of research data concerning clinical projects. Typical responsibilities include selecting and observing subjects, and then helping out with the analysis of acquired information. A high school diploma (or its equivalent) paired with two to four years of related experience is required for this job. An array of tasks is encountered, which allows an employee to exercise their creativity, judgment, and planning skills. It is not uncommon to report to a supervisor or manager. The average annual salary for this job title ranges between $37,063 and $68,018.

Market Research Analyst

The collecting and analysis of data in regards to existing and potential product/service markets is one of the main concerns of a Market Research Analyst. Knowing the competitors within the market and keeping an eye on change within the industry is another important part of pursuing this kind of career. A bachelor’s degree (with zero to two years of experience in the field) is necessary in order to build a working knowledge of commonly used concepts, practices, and procedures associated with market research. The average salary is seen between $35,182 and $56,999.

Research and Development Director

If you are interested in becoming a Research and Development Director, there is a lot of experience required in order to fill the shoes of this lucrative position. As director, a watchful eye is needed in order to keep tabs on the research and development policies of an organization. You will review and approve objectives and initiatives concerning the future of a company. The research and development programs you back should boost the profitability of a business and hopefully create more of a threat to competitors. A bachelor’s degree with at least ten years of experience in the field is required to apply for this position. Typical salaries are seen between $98,732 and $253,482.

Market Research Manager

As a Market Research Manager, you will manage the activities that take place within the market research department. It will become your duty to oversee the inner-workings of a team of analysts to make sure they follow proper procedures concerning analytic techniques that access the various demands for products and services on the market. You will become a wizard at predicting consumer trends and become responsible for looking over current research projects. A bachelor’s degree in an area of specialty with at least seven years of experience in the field is necessary for this position. It is also important that you are able to lead and work well with others. An average yearly salary for Market Research Manager is seen between $65,538 and $114,791.

Operations Research Analyst

The collection and analysis of data in regards to the evaluation of operational difficulties is one of the many duties of a Operations Research Analyst, who will later suggest the best course of action when it comes to solving issues concerning a company. A bachelor’s degree and zero to three years of experience is required for one to gain a sufficient amount of knowledge for the execution of typical concepts, practices, and procedures concerning your job. Yearly salaries for this position range from $30,126 to $61,010.

Best Companies in Research and Development

When looking for the best companies to work for in the field of research and development, using the Fortune magazine’s “100 Best Companies to Work For” list could become a rather helpful starting point. Making the list for 2008, FactSet Research Systems Inc. has proven itself worthy in the world of integrated financial information and analytical applications. As a small company, it ranks #20 on the list and captured the #52 overall position on the Top 100.

Another praiseworthy company is Genentech, which showers its employees with an onsite farmers’ market and day care for dogs. Their 401(k) match is rather impressive, where employees also enjoy access to an onsite fitness center, subsidized gym membership, job sharing program, compressed workweek, and telecommuting. The most common salaried job at Genentech is a Research Associate at $85,880. There is also a satisfying balance of minority and female employees in the company.