When you start investing, it is best to choose companies that have value to you.
Investing is not just about finding businesses at really good prices, but about understanding when to enter or exit the market. To aid in your understanding, I have compiled a list of essential investing tools that anyone buying or selling stocks should know about.
Get my FREE investing calculators that will help you determine if your investment is a smart one.
1. 10-K and 10-Q Reports
The best way to determine a company’s value to you is by examining its financial statements. The 10-K and 10-Q, the annual and quarterly reports, not only provide financial data but also highlight a company’s strengths and weaknesses. This is crucial information you would not be able to obtain just by glancing at the stock market section in the newspaper.
The 10-K is the SEC form that a company is required to fill out annually. It is a comprehensive summary of the company’s financial performance throughout the year. The 10-Q is the SEC form filled out quarterly to disclose unaudited financial statements and provide the company’s financial position for that given quarter.
How do you find this information?
You can log onto SEC.gov company filings and search for a company’s 10-K or 10-Q.
Even easier, you can Google the name of the company and go straight to their website.
Keep in mind, if it is a retail company you are researching, they may not have anything on their retail website that will indicate where to find these kinds of government filings. In this case, Google the name of the company plus “investor relations.” The website will provide the data you need, downloadable as a PDF.
You should have no trouble finding a company’s 10-K or 10-Q as they are required to file.
2. Find the Financial Metrics
There are three companies that I like to use to find the financial metrics of a given company.
These companies are:
These websites provide information on financial metrics, track stock picks, and examine the portfolios of the best investors in the world.
The main focus of these companies is value investing. Value Investors buy stocks at a discount to what they believe they are worth, or their perceived value, in hopes of that these investments will rise over time to reflect their intrinsic value.
3. Use the Rule #1 Investing Toolbox
I have created a toolbox on the Rule #1 Investing website. It includes all of the information I have previously stated about where to find a company’s 10-K, 10-Q, financial metrics and more. I've compiled information from over 8,000 different companies, just to get you started.
4. Keep Up With Market News
Another essential tool for tracking the market is keeping up-to-date with market news.
I like to peruse the Wall Street Journal to keep up on not only market news, but general news. It also provides information on individual companies. I also read Barrons.com to get ideas on trades I can make.
There is most likely market news on any other news site that you may use to keep up with current events.
Remember, the best deals on the planet sometimes happen to be on the front page!
5. Use My Investment Calculators
I've set up several different FREE investing calculators on my website to aid in your investment calculations. There is one for sticker price calculations and one for margin of safety calculations.
Also, my Payback Time calculator can be used to show you how you would look at buying a company based on the value it would have for a private investor.
Lastly, my ROIC calculator calculates return on invested capital.
All four are there to help you on your search to find businesses that match your values and potential investments. If you use the tools I provided, you will have a much easier time finding companies of value, as well as tracking the market and deciding when to enter or exit.
What is your favorite website to use for investing research? Where do you go for tools? Leave a comment below and I’ll be sure to follow up with you.
How to Pick Rule #1 Stocks
5 simple steps to find, evaluate, and invest in wonderful companies.
