I tend to put my initial emphasis on four things - revenues, earnings, dividends, and the dividend payout ratio. If those numbers look good, I dig deeper into current and future P/E ratios, the PEG, the current and future earnings growth rates, dividend growth rates, etc.
I can’t begin to understand a company until I see at least the last 5 years revenues, earnings and dividends. Ten years of information is even better. I tend to drill down and look at growth rates and put more emphasis on the more recent years’ data because older numbers may not accurately reflect the company’s business prospects. For future data I look at brokerage analyst’s projections. I generally look for companies that several analysts are following so I can look at the average projections. I tend to believe that a sample of at least 5 analysts are needed to get a useable average but like data, more is better.
This seems obvious but any investment I enter into I expect it to increase the value of my portfolio. This means that the future projections must be pointing upward. I don’t have a specific increase expectation but instead I use those expected increases for comparison and prioritization.
I also like to read the biographies of the senior management personnel. Hopefully management has extensive experience in the industry that the company operates in, are high achievers, are highly motivated and are honest.
Another item I look at is whether the company has a unique position in the industry. I want to know if the company produces a unique product or service and if there’s a high barrier to entry for other companies. This is often referred to as having “a moat”.
I used to do all of this work in spiral notebooks, and the more extensive research is still done that way. But today I do most of the front end analysis and publish it here on this website. The reason is because this way it'll reside in the cloud and I can then review this information at any time from my desktop, laptop, tablet and smartphone. It’s a tremendous asset.