5-Minute Stock Analysis for Beginners | How to Analyze Any Stock

In this market, good stock analysis is the only thing separating winners and losers. Learn how to compare stocks to find the best investment. See all your stocks in one place with the Front app, free to download https://getfront.com/joseph_hogue/

For years it seemed stock prices did nothing but go up and all you had to do was invest in the hot stocks of the moment. That’s over now and momentum investing is not enough. To make money in this market, you need to be doing the kind of stock analysis that identifies potential investments.

In this video, I’ll share a simple process to analyze any stock. I’ll take you step by step through comparing stocks and how to choose investments with a process that can take less than five minutes. I'll also reveal how to do portfolio analysis to make sure each stock fits with your investments.

Let’s start with that step-by-step stock analysis and understand, this is going to be purely bottom-up stock picking, something different from the top-down process we usually talk about on the channel. Remember, a top-down strategy would be starting with those big trends and the economic forces driving a specific sector of the economy. That narrows your list of stocks to just those in that sector or theme to choose from. Bottom-up stock picking starts with the companies, picking a target company or an industry and then analyzing the fundamentals to pick the best in the group.

For our stock analysis process, we’ll focus on two ideas; valuation and competition. Is this the best company in its industry and is it the right price? For competitive stock analysis, we'll compare stocks on sales growth and operating market. This isn't just to see which stocks are growing sales faster and which are more efficient but to uncover the qualitative advantages in companies as well. What is allowing these stocks to produce faster growth?

For stock valuation, we'll be comparing stocks on the price-to-sales ratio against each other as well as against their own historical valuation. This will show use not only which stocks are relatively cheaper but also which are cheaper over time.

Remember to always compare stocks within the same industry, direct competitors for a specific product or service. This will give you a better comparison for finding those best of breed stocks.

The preceding content is not intended as a recommendation to buy, sell, or hold any particular security and is for educational purposes. Please see Front’s Terms and Conditions: https://getfront.com/tos/
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Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through debt payoff strategies, investing and ways to save more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps.

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