How to do Free Research on Stocks


When investing in stocks, research and due diligence is an absolute must. Even if you are engaged in “technical analysis,” and make investment decisions primarily based on the directions and trends of the stock charts, you still must know something of the company behind the stock. There are, of course, a great many subscription-based newsletters, fee-based Web sites, and investment advisors who charge by the hour. Many do offer excellent advice that can help you make money. However, for those just getting started or for those who are just plain cheap, there are ways to gather this intelligence yourself, and at minimal or no cost to you.

One major source of intelligence that you can leverage when researching a stock is the company’s own web site. It is, of course, necessary to separate the public relations “fluff” pieces from the real, factual information that you can use, but this is definitely the place to get started. A quick review of a company’s Web site will tell you several things: It will tell you first of all, how active they are in promoting themselves. Although those fluff pieces may be meaningless in terms of gathering hard metrics, they are nonetheless important to make note of, because they not only give you some indication of the direction the company is going, but their very existence lets you know that the company is much more likely to be proactive in self-promotion. The existence of a lot of press releases, press mentions, white papers, and other similar material ultimately contributes to greater sales and a good public image. That’s a good stock to invest in.

The Web site will also give you some hard statistics. Most corporate Web sites will have an “investor relations” site, which will give you some background on the corporate officers as well as the company itself, links to recent 10-K and 10-Q filings, annual reports, analyst coverage, and fundamentals such as dividends, revenue metrics, and various ratios such as price-to-revenue and price-to-book often used in making investment decisions.

Also, many of the fee-based sites online offer a basic amount of free information, which is easily accessible and quite useful. Sites like Quote.com and Yahoo Finance give you stock prices (usually delayed by about 20 minutes), stock charts, historical price trends, analyst opinions and key statistics. These sites also contain message boards, which do not necessarily contain factual information, but are still useful in getting a feel for the level of excitement that exists about a particular stock. Hoovers (www.hoovers.com) is also a valuable source of both free and paid information, as well as the web sites of the NYSE and NASDAQ.

Stock market newsletters usually are fee-based, but often contain a free Web site as well, and these can be useful sources of information. However, publishers of stock market newsletters often are paid substantial fees by corporations to promote their stock. Nonetheless, the information contained therein is often useful, and a good newsletter will be able to generate excitement and interest about a stock that will translate into at least a temporary rise in the stock’s market price.

 

Information is for educational  purposes only and is not be interpreted as financial advice. This does not represent a recommendation to buy, sell, or hold any security. Consult your financial advisor.

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