Halal Investment Series Part 1
There are almost what seems like an infinite number of companies to invest in. How do you know which company to invest in? How should you find the information required to research these stocks? What is the best way to find stock? Today we will talk about Public Companies & Financial Information.
Companies that are listed on the stock exchange are known as public companies. Public companies had to go through a process called Initial Public Offering (IPO). An IPO is a process that allows private companies to list their stock on an exchange and become public. These public companies have a duty to their investors to reveal critical financial and operational information to help investors make decisions.
The best way to find stock is to do in-depth research. These companies post reports for U.S companies the 10-K annual report, 10-Q quarterly reports, Form 8-K current reports, proxy statements, and additional disclosures. Investors use the information in these reports to trade stocks. Disclosure: Different countries have different names for these reports but essentially give the same type of information.
Three takeaways on how to find a stock especially for beginners. First, gather our stock research materials. Observe and review the company’s finances. This is called quantitative research. Secondly, narrow our focus. Observe the company’s revenue, net income, earnings per share, and price earning ratio. Thirdly, turn to qualitative research. Warren Buffet once said, “If quantitative research reflects on the black and white of a company’s story, then qualitative research reveals the multicolor of the company.” Then, put our research into context.
There are multiple websites online that simplify information for you so you can make the best judgment when investing. For example, finance.yahoo.com, marketwatch.com, seekingalpha.com, and musaffa.com.
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Besides, feel free to sign up for our free stock screening services at musaffa.com.