Your Questions About What To Look For When Investing In A Company

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Ken asks…

What is good to look for in a company when thinking about investing?

where can I find a good list of qualities to look for in a company I am considering in investing in?

financi4 answers:

Check out the companies financial statements and information (usually can find on companies website under investor information or investor relations), and helps if you have a fair amount of knowledge of what the company does or specializes in to help predict profits.

Robert asks…

When does a company have “zero debt”?

I’m confused with the difference between “debt” and “liabilities”. I understand that liabilities mean ‘what the company owes’.

So, do liabilities = debt?

In other words, are ‘accounts payable’ and ‘accrued expenses’ included as debt too?

So when Warren Buffet looks to invest in companies with low to zero debt, I’m thinking he means he looks for companies that have zero accounts payable and zero accrued expenses. Is that right?

financi4 answers:

The terms are used interchangeably, unfortunatley. Some people refer to total liabilties as total debt. Many investors refer to debt as only interest bearing debt.

There’s no clear answer, but the warren buffet thing, i think he’s talking about zero interest bearing debt, b/c yes, of course those companies have other liabilities.

Mark asks…

When investing in a company, what are the best things to look out for?

e.g. potential for future growth, return on equity? etc etc.

im interested to know what are some important factors to be aware of as i am a beginner and very interested in investing.

financi4 answers:

I always look at the LONG term potential apart from the hit and run sub penny shares on AIM then its easy just to buy in with the momentum upward trend then sell when the profit taking begins – used to do that ALL the time with a company called Vialogy (VIY ) as every new contract used to take it to around the 7 pence mark until the sell off lowering the price back down within just a few days but now its a flat liner ,great while it lasted though….

Thomas asks…

What should i look for when investing and specifically which companies should i invest in to accumulate the mo?

I am playin the stocks quest in my econ class, a simulated stock trading game.

financi4 answers:

This is just for the game not to be used in real life. I would buy a ton of different penny stocks (stocks that are less than $5.00 per share)
CMRG was at 0.40 last time I checked.

FNM was about 0.50

COMS is 1.70

THC is 1.20

Look for more things like that.

Michael asks…

What things do you take into consideration when investing in a particular company?

What are some of the things that you look for when deciding on which company to invest in?

financi4 answers:

Below is kind of a checklist that I use when considering whether to invest in a company…not all my investments have all the following attributes but I like to invest in companies that have most of them.

1. Is in an industry expected to grow faster than the market avg.
2. Has stable management
3. Has an earning growth rate near or higher than the P/E ratio
4. Has increasing cash flow from operations
5. Insiders are buying more shares on the open market
6. Has little to no long term debt
7. Is buying back shares

James asks…

I’m looking into investing. What is the best site or company to go with?

I’ve taken various financial classes when I was in college. I have never invested before and wondering what you feel are some of wonderful companies to look into. I don’t mind doing it online, I just don’t want someone who has a lot of charges and fees and I won’t get as good of an investment back.

And as a secondary question. I’m matching my work for my 401k, but me being 27 now, is it worth still investing in a Roth IRA? I know I should have done that when I was 18 or 19, but wanted to get people’s opinions about it. Thanks in advance.

Email is pcbatl@yahoo.com if you wanna contact me.

financi4 answers:

First check out Morningstar.com for ratings of various funds and stocks. Most of it is free.

I have accounts at Vanguard.com, TD ameritrade.com and Charles Schwab.com. Vanguard has my mutual funds. There are no fees, commissions, etc. For stocks, I go to TD Ameritrade and Charles Schwab.

If you want to know which stocks to invest in, watch Mad Money on CNBC weeknights. The best show on TV.

Finally, after you match what your employer offers, put any additional money in a Roth IRA. Pick up a book by Suze Orman or watch her show Saturday nights on CNBC.

I wish I was as young as you and could do my investing all over. I’d be a millionaire by now.

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