- 1). Choose a few companies you are interested in. These could be companies whose products you admire, companies that make items you use every day, or just firms that happen to be in the news that day. The key is to choose a handful of stocks from different industries and compare them as investments.
- 2). Obtain a copy of a well-regarded financial publication such as the Wall Street Journal, Barrons or Investors Business Daily. Check the index at the front of the publication for news about the companies you have chosen. Read any stories that mention the companies you're interested in to get a better handle on how current events and future possibilities can affect the share price and how investors feel about the stock. In addition to traditional print media, you can make use of online financial resources like Yahoo! Finance, the Motley Fool website and CNN Money) These sites, and others like them, provide a wealth of information investors can use to identify promising companies and find up-to-the-minute financial information.
- 3). Check stock tables for pricing information on the companies you want to research. Look for a publication or online source that provides a detailed stock listing for each company, including not only the current price but the 52-week high and low, the earnings per share and the amount of any dividend.
- 4). Compare the 52-week high and low for each stock you're interested in--this can be a good indication of how volatile a stock is likely to be over the long term. A company whose 52-week high and low are within a few dollars of each other is likely to be far less volatile than one whose 52-week high is significantly higher than its low for the past year. Of course there are no guarantees in the stock market, and it is important to be aware that the fortunes of the company could change significantly due to unforeseen circumstances.
- 5). Check the earnings of each company to calculate the price to earnings multiple. To get the price earnings multiple, divide the current price of the stock by its earnings per share. While there are no hard and fast rules, a company with a low price-to-earnings ratio can have a better chance of future appreciation than one whose price-to-earnings multiple is already high.
- 6). Go to the website of the companies you're interested in and look for their latest reports. These can give you a company's most recently quarterly financial information and its own outlook for the future. Compare this information to what you've learned from outside sources to get a complete picture of the company.
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