Net Income, EPS? Does EPS really matter to some companies that just want subscribers like netflix? There are companies that do well with negative cashflow right? Wasn't Amazon and Tesla stock doing well in early days even though they were losing money? I think Amazon just had razor thin profits.
If you had only 1 hour to look at a financial statement, what would you glance at?
- Thread starter RGLD
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IBD websit/eps;
but 10year/ all data charts more than anything noted here........................................
Right;
+ AMZN /TSLA looked lousy on fundamentals for years.
Same way some investors buy ugly houses + fix'em up/wait+ profit.....................................................
You can look at a lot in an hour. One thing I always, always look at... is the CEO and what they've done with and accomplished in their lives. It's definitely in my top 5 metrics. Always.
Assuming CEO has the power right? Sometimes CEO's are just there, the board get to decide. Somebody more low key like an high level MD or a CFO can influence the company?
The title of your suggests you have the idea of screening financial reports for exceptional investment ideas as your post mentions exceptionally performing stocks.
Ok, I take a stab at it. Some keys, top of mind, are to understand the company’s business model, barriers to competition, market size, current company market penetration, management style, management quality, regulatory environment, technological roadmap of company’s industry as well as competing and complimentary industries, and in depth knowledge of their product and or services as well as their competition.
Further, identify the company’s market position. Could the company’s product be considered commodity based where economies of scale and industry supply changes garner greater focus? For example, semiconductor manufacturers.
Is the company integrated where small changes in sales can have a greater relative impact on their bottom line? For example, integrated petroleum companies.
Is the company retail based that involves brick and mortar stores? An important indicator of growth potential here is current number of stores divided by market saturation. For example, CVNA and CMG.
Has there been a major regulatory change or incentives offered by the government to encourage investment into a new or existing industry that involves government contracts? If so, look for links between management and politicians. For example, Enron, alternate energy, healthcare, etc.
Does the company offer a high end retail product? Be particularly aware of their new products and that of their competition. For example, AAPL.
Technology companies frequently “Shed” talented employees looking to leave the bureaucratic morass of their company and put their novel ideas into a startup, making tracking key people potentially a productive area for finding early opportunities. For example, IBM, GOOG, AAPL, INTC, etc.
Reading industry trade journals can also be a source of good ideas. Sometimes one can get a sense who a major player is in a industry segment while their financials don’t yet stand out and have yet to be assigned a price premium by the equities market for their leading market position. Think NVDA a few years ago.
Having in depth knowledge of IPOs as well as lead underwriters can provide trading opportunities, including short term ones.
A common denominator to the above list the long term viability of large institutions to accumulate and distribute a large position without undue market impact. As such, they are more likely to put greater weight on revenue growth, backorder to sales ratios, accounts receivable to sales ratios while considering where we are in the economic cycle, changes in market share, management quality, etc., than on a particular earnings per share number. Speaking of earnings reports, knowing the underlying metrics of a company can provide a nice fade opportunity should a stock price make a substantial move seemingly based on a headline number opposite to its underlying fundamentals.
Annual reports are a great source of information. A potentially solid source of information is where management discusses various risks to the company.
Biggest thing for me: start reading from the bottom of 10-Q and work up. All the stuff they want you to see is at the top.
Would someone please turn off this bot.
Oh absolutely, there is no "one size fits all" by any means.
It all depends on the company and where it's at with regards to its evolution and what's going on; be it 1,2, 5,10,or 80 years old.
I was going to write that.
There are lots of factors to consider when evaluating what exactly a CEO can do.
It is certainly a case by case basis. GM's board has a lot more power over the CEO than say .... pick any stock.
Like I said, there is no "one size fits all".... but when it does matter.... you can make bank, long term, by betting on a dynamic and charismatic CEO.
Imagine what would happen to PNC stock if Jamie Dimon resigned from JPM to run PNC.... it would spike 20% overnight. Long term.... we'd have to evaluate Jamie's job at JPM.
In this particular example, I'd buy PNC, post initial spike.
For the long term.....