How To Find A Potential Company To Invest In Or For Further Review

Most people start their life out by making ordinary earned income as an employee. In fact, I still earn income as an employee, but over the years, I have learnt that the path to building wealth starts by converting your earned income into investment income as efficiently as possible. This way the money you’ve earned can start earning money for you. I also learnt how to find a potential company (on the Nigerian Stock Exchange) to invest in or to watch for further review. These lessons have helped me in a lot of ways, that’s why I am sharing them with you.

How To Find A Potential Company To Invest In Or For Further Review

Courtesy of Snappa

Here’s how anyone can roughly find a potential good company to invest in or for further review purpose (on the Nigerian Stock Exchange market):

1. Get a recent The Punch paper or any newspaper with daily stock market prices report. I also use NSE or CapitalAssets.

2. Look at each industry with keen interest to find a good company with a bargain (low) share price – depending on your nature – you may be a bearish or a bullish person.

3. Pick one or two companies in each industry.

4. Get the company’s past five (5) months to one (1) year stock market reports (of course, you can get it randomly) – your mission is to check their price movements – whether upwards or downwards, i.e. increase or decrease in their share prices. If you can’t find a printed copy, go online and search for these information, you will surely find a soft copy there. You can check CapitalAssets or NSE.

You don’t have to be rich before you learn how to invest. Learn how to invest then you will be rich. – Abiola Omodele

5. Go on a further review of their profitability over the past 5 years. Check whether the companies you’ve chosen made profit/loss over the years. Also check whether they’ve grown from what they use to be in past years. Information like these are the things that affect companies’ share prices. But in Nigeria, things are stabilising; a company may be growing (employing good managers, making profits, acquiring other companies, or providing satisfactory customer service) while its stock price nosedive (if you see something like this, it may be a good buy depending on when the prices will take upward again).

6. It’s that simple. If you’re good, you can make your decision from No. 5.

To your success!

If you have a question, post it below.

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