What information should I research about a company prior to investing in them?
What websites should you visit to learn more about a company before you decide to invest in them? What numbers should you research before investing (e.g. EPS, beta, MACD)?
It's great that you are putting the effort to learn about investing. I want to point out that you have mentioned terms that are fundamental (EPS), quantitative/statistical (Beta) and technical (MACD). I would suggest you pick the method that best suits you. Personally, I prefer fundamental analysis.
To perform fundamental analysis, you must analyze
1) How much the company is earning: EPS, cash flows, profit margins.
2) How they are earning it: Are they capital intensive (Capex), how much debt if any are they using (Debt/Equity, Net Income/Interest Expense), Operational efficiency (Turnover ratios), how do they make money?
3) How are their earnings expected to grow (Industry prospects, company's competitive strengths, earnings growth)
4) How much are you paying for the company (P/E ratios, Price/Cash flows, discounted cash flow analysis)
Not everything is based on numbers, there is also a lot of qualitative analysis such as understanding the product/service and quality of management.
One of the best source of information is the company's website which usually has a lot of information about the company. The 'Investor Relations' section usually has a lot of information such as presentations, earnings reports/transcripts, annual report and SEC filings such as 10K, Proxy statements etc. Other sources of information could be third party sources such as Morningstar, yahoo finance, google finance and if you can get it Bloomberg.
You are asking a great question and one which is applicable for almost all investors. First, visit the company web site and research what the company does, its business history, and board of directors, as well as the history of stock performance. I would download the latest annual report, along with the most recent earnings releases, probably as far back as a year, and if you want to be thorough, even 3 years ago or more. Also, go to the investor section and look at any recent investor presentations they have given, typically to investment banks or buy side analysts. I would then go to Google FInance or Yahoo Finance and look up their key statistics like the number of shares outstanding, the stock price, insider ownership, financials (income statement, balance sheet, statement of cash flows, statement of shareholder equity). I would want to know how much cash flow and free cash flow the company generates, how it has grown (or not) over the last 3 years, and what kind of cash flow and free cash flow yield as in comparison to total revenues they have (% wise). You should look at revenue growth, operating income growth, net income growth, and cash flow from operations and income growth. Look on the balance sheet for debt as compared to cash and current assets (accounts receivable and inventory). You can then start to look at valuation statistics like price/book, price/earnings, price/sales, market cap to cash flow from operations, enterprise value/EBITDA or EBITA. I would then compare those to other companies in the same industry to get a sense of relative value. I hope this helps answer your question.
Yale Bock, CFA
Y H & C Investments