Researching Publically-Held Companies

Posted: 19th September 2019 08:32

Helping Investors

Publically-held companies seek to make a profit for their shareholders. The relationship between a publically-traded company and its shareholders is a kind of mutual agreement. The company keeps adding services and products to generate income and become more valuable to the shareholders. In turn, the shareholders see that actions speak louder than words and are receiving an excellent return on their investment and either buy more shares, keep their shares, or decide to sell their shares. The same relationship is also a catch-22, for if the company doesn't increase in value, it will lose its shareholders to other stocks that make a higher return on their shareholder's investment. Every company needs to perform well and consistently in order to retain its investors. The investors are in no obligation to remain with one company or stock.

Considering Low Priced Stocks

If an investor wants to have more time to learn the world of investing, they can choose a lower-priced stock. Many stocks are being traded at low prices. The investor needs to find the best low price stocks to invest, since not all shares are created equally. That is, some stocks have the overall package of a great product, excellent management, forecasted growth every quarter, plenty of cash on hand and in the bank, new products ready to launch at least once a year or more, and have new patents and trademarks pending or filed. These are all the hallmarks of a great company like 3M, Ford Motor, GM, and now Motorola, Cray Computer, DEC, Apple, and Microsoft Computer.

Inner and Outer Value

Because a company has shares that sell at a low price doesn't necessarily mean it is a "cheap" company. These are just a few companies that slid into penny stocks but rose above that to become some of the best-traded stocks: Xerox (XRX), Radio Shack (RSHCQ), and Eastman Kodak (EKDKQ). It is not where you are that counts, but where you end that makes a difference. These companies kept their eyes on the goal and made the changes they could at each moment they had to help make their company the best it could be for its shareholders.

What Is a Publically-Held Company

A publicly-traded company is a private company that decides to go public. A public company is one that is split into shares for the sake of those who want to purchase part of the company. Having part of a company is called its shares. The more shares a person owns, the more it holds of the company. A company that goes public is given a ticker symbol different from others that investors can refer to when purchasing its stock.

Knowing How to Make Good Deals

To make headway in the stock market, a company needs to be able to make deals that matter to the investors. For example, a company that mines for gold makes a deal to acquire new mining territory where they have found traces estimating to be 150,000 ounces of gold. Making good deals is a plus for a company, and when an investor is researching a company to invest in, he needs to do his research to see what new contracts the company he is investing in has made in one to five years going back in time.

Doing Diligent Research

A company will be only as valuable as the knowledge of its worth. In other words, every good thing the company does as far as products, services, good news, R&R, profitable quarters, early growth over last quarter or year, and acquisitions are just another reason to invest. Take time to do research on a company you want to invest in to strengthen your investment strategy.

Measuring the News of the Day

Anyone familiar with the stock market understands how much it depends upon the good news of the company. If bad news gets to the press, it can have an adverse influence on the life of a stock. For example, someone in the management makes a big mistake, or one of its products harms or hurts someone. Investors will sell their shares when they hear bad news about a company in which they own shares.