Choosing a company to participate in stock investing in it is not easy to need precision and caution. Not all companies can be selected and need a lot of review and consideration to see the performance of the company. Because our goal of investing is not just buying shares and then selling back when the price goes up, but to really get a long-term profit from the company with the least risk.
We need to find a company that is healthy, safe, stable, growing and increasing profits every year. The company must also be far from the signs of bankruptcy and failure. It would be better if the company has been established for decades, the product is widely known from generation to generation, so that our stock investment continues to be profitable and can also be passed on to posterity.
Here are tips on choosing a company for a stock investment:
1. Choosing a company that has prospects
Prospective companies usually offer products that are attractive, needed and follow market trends. It does not matter if the company is just running. If the company is a good prospect to the future, immediately buy the shares of the company. But if the company is long established, we need to know how the company’s development from year to year based on the company report.
2. Choosing a company whose products are well known and wide
Companies that produce people’s needs, have fame, everyone knows him well including us, surely that’s more reliable. If the company is engaged in services, the service must be good and we feel the quality of service. for example google company, its products are widely known and used by many people.
3. Choosing a company that has advantages
Companies with good products and have a characteristic, it is more prioritized. These products certainly not only follow the trend of products from other companies, but also have a reliable product and superior when compared with other products. companies that have more value that makes it able to compete. For example, Apple whose price tends to be more expensive, but many people choose their products because of innovation that makes it superior. Another example, competitive advantage can also be from brand strength. There are plenty of soda drinks, but Coca Cola still excels.
4. Choosing companies that tend to be monopolistic
Fewer companies engaged in certain sectors of course make the stock price stable. this type of company is very good for us to invest long term in it because the risk of volatility is very low. Companies that have a large market share usually reach all groups of society and usually the sector in the field of consumption.
5. Choose a company that has a cheap stock price
If you include people who are happy about big challenges and profits or you are including people who are just starting in the field of investment. Start investing in a company that sells shares at a low price. in addition to buying a lot of stocks, stock prices are expected to skyrocket or there is an increase steadily along with the progress of the company. so it takes carefulness in analyzing the company’s future and the company’s management.
Then how do I check the company management?
You can check your company’s management by finding as much information about the company. After that, check the financial statements and history checks from the management. In addition, you also need to check the company’s management by attending the General Meeting of Shareholders. All shareholders are entitled to attend the GMS. There you can meet face to face with the company’s management.
Next check also GCG (Good Corporate Governance). GCG or corporate governance is a set of company policies to run as expected by all parties. Parties are not only shareholders, but also consumers, suppliers, and the environment. Good GCG also provides a win win solution for all parties. Good corporate governance protects all parties and avoids the unethical attitude of the company. There are some basic principles of GCG such as transparency, accountability, responsibility, independence, fairness, fairness, integrity, honesty, and obedience to the law.
Companies that have GCG can be more effective and have a good relationship with the community. Some characteristics of companies that have good GCG: the existence of transparency of financial statements, not manipulated. A transparent Financial Report can be checked in depth and logical with causal relationships.
The structure of the board of directors covers various parties and is independent. Also check whether the company respects the rights of stakeholders, such as not late in business debt repayment.
the tips above are very important to note to complete the numbers of financial statements that could have been manipulated. The above tips and guidelines are complementary to your consideration in determining a good company to invest. So if you are an investor, in addition to financial statement analysis of understanding of the company should also you learn. may be useful