How To Research Stocks On Your Own

There are many people who are keen on investing in the stock market, but who are not necessarily confident, or comfortable about making those all-important investment decisions. No matter what level of investment, large or small, it’s important to know something about what you’re putting your money into. So, if you are an investor and are prepared to be self-reliant, then you need to think about how to research stocks and basically become your own stock analyst. This article is aimed at giving the less experienced investor a helping hand in terms of providing some useful guidance on to how to research stocks on your own.

Where Is The Information?

The first step is to begin thinking like an analyst – develop an enquiring mind. You need to find out what to buy or sell and at what price. Analysts usually focus on one particular industry or sector. If it’s a sector then they’ll focus on certain companies. An analyst’s aim is to probe into the businesses of the companies on their list. They do this by analysing financial reports and as much other available information as possible about the company. To cross-check the facts, analysts also dig into the dealings between the company and its suppliers, customers and competitors. Some analysts also visit the company, engaging with its management in order to gain a first-hand understanding of the workings of the company, and so over time they connect all the pieces of information together to get the full picture.

Before making any investment, you should do your own research. It is always better to research several stocks in the same industry so that you have a comparative analysis. However, the biggest constraint in doing your own research will probably be time. Retail investors who have many other things to do may not be able to devote as much time to research as professional analysts. However, you can surely take up just one or two firms in the beginning and test how well you can analyze them. That would help you in understanding the process and with further experience and time, you can add more stocks for analysis into your portfolio.

Can Analysts Help?

Getting your hands on anlaysts’ research reports can be a great way to start your own analysis. That way, you save a lot of time and learn much about your selected company simply by reading these reports. You may not necessarily want to follow their sell or buy recommendations, but you can get a great overview of the company, including its strengths and weaknesses, main competitors, industry outlook and future prospects. Analysts’ reports are loaded with information, and reading reports by different analysts simultaneously would help you in identifying a common thread. Opinions may differ, but basic facts in all reports are usually very common.

In addition it would be wise to take a close look at various analysts’ earnings forecasts, which ultimately determine their buy or sell recommendations. Different analysts may set different target prices for the same stock. Always look for the reasons while reading analysts’ reports. What would have been your opinion about the present stock, given the same information? No clue? Then move on to the next step.

What To Look For?

Let’s take the analysts approach in learning how to research stocks on your own. Firstly, try to understand the various steps involved in analysing a stock. Some analysts follow a “top-down” strategy, starting with an industry and then locating a well-performing company, while others take a “bottom-up” approach, starting with a particular company and then learning about the outlook for the industry. Either way is good, but try to take account to the following:

analyze the industry – there are publicly available sources of information for pretty much any industry. Often, the annual report of a company will give a good overview of the industry, along with its future growth outlook. Annual reports will often also provide information about the company’s competitors in their industry. Simultaneously reading the annual reports of two or three companies should give a clearer picture. You can also subscribe to trade magazines and websites that cater to a particular industry for monitoring the latest industry happenings;

business model – take a look at the company’s strengths and weaknesses. Is it a strong company in a weak industry, or weak company in a strong industry? The strengths of a company are often reflected in things such as its unique brand, products, customers and suppliers. You can learn about a company’s business model from its annual report, trade magazines and websites too;

financial strength – this is arguably the most important element of all when analyzing a company. You need to take a look at a company’s balance sheet, income statement and cash flow statements. Often, the numbers in the financial statements offer more information than the words in the annual report. In case you are not comfortable with numbers, no need to hesitate, just start learning as early as possible;

management – have you ever heard the expression there are no good or bad companies, only good or bad managers? Senior executives are responsible for the management and future of any company, so assess company management and board quality by doing some research on the internet;

growth outlook – it’s well-known that stock prices track earnings, the higher the earnings then, typically, the higher the stock price. Try to find out what you can about where future earnings are predicted to be. This is not too easy and analysts tend to make their own estimates by looking at past figures of sales growth and profit margins, along with profitability trends in that particular industry. It’s basically connecting what has happened in the past to what’s expected to happen in the future. Making accurate enough earnings forecasts is the ultimate test of your stock analysis capabilities, because it’s a good indication of how well you understand those industries and companies;

valuation – if you are able to establish indications about future earnings, the next step is to know about the value, or worth of a company. Analysts need to find out how much the current market price of the stocks is justified relative to the company’s value. There is no “correct” value and different analysts will use different parameters. For example, “value” investors look at intrinsic worth, whereas “growth” investors look at future earnings potential;

target price – try to establish a target price. Once you have established future earnings potential, calculate high and low target prices by multiplying estimated earnings per share (EPS) with the estimated high and low P/E Ratio. The high and low target prices represent the price band within which the future stock price is likely to move in response to the expected future earnings.

Finally

A lot of what is outlined above is really useful in showing you how to research stocks on your own. Ultimately you want to make a profit, and one of the best ways to give yourself the best chance of doing that, and avoid paying someone else to do it for you, is to do your own research. It can be fun, interesting and will certainly increase your understanding not only of the stock market more generally, but also, of those particular stocks and companies that you have an interest in.

Eye-Tracking For Marketing Research

Ever watched a TV commercial and not known what it was advertising? Sometimes we can see the same advertisement day after day and even become familiar with the advertisement’s narrative content. Yet when asked what the advertisement is trying to sell, we are at a loss. The question is why is the commercial failing so badly?

One way to answer this question is to run a marketing research study and simply ask respondents why they didn’t or couldn’t engage with the branding message in the advertisement. This might provide an answer. However, research has shown that visual attention is complex and involves both conscious and unconscious impulses. Because visual attention often depends upon unconscious impulses, respondents may not really understand their own visual behaviour. This can lead respondents to give rationalizations for their patterns of visual attention that are, in fact, quite wrong. This is a serious problem as, in marketing research, a wrong answer is often much worse than no answer at all.

You may well have heard of eye-tracking for marketing research. When used in a marketing research study, eye-tracking can give important insights into viewers’ engagement with marketing material through visual behaviour analysis. At a very basic level, visual behaviour analysis allows the marketing researcher to see through the eyes of the customer and to determine the customer’s focus of attention at any given point in time. The hope is that by conducting visual behaviour analysis, we can spot potential problems with the marketing material before the campaign is launched.

What can visual behavior analysis tell us that we don’t already know? Marketing professionals rely upon marketing research to garner insights into customer opinions and behaviour. This data is often interpreted with the aid of empathic skills, intuition and experience. However, eye-tracking gives a more direct access to the viewer’s thought processes through visual behaviour analysis. This is important as eye-tracking is not merely about viewers’ eye-gaze patterns: visual behaviour analysis helps us understand what the viewer is thinking. When we watch a viewer’s eye-gaze pattern over an advertisement, we gain an understanding of the viewer’s thought processes. What they are looking at and why? Are they paying attention to the key branding visuals? What is the link between attention to branding visuals and the ability of the viewer to recall branding information at a later date? Do the viewers read textual information? If so, how much of the text do they read?

These are just some of the generic insights offered by visual behaviour analysis. However, when we combine visual behaviour data with contextual information relating to the advertisement, the respondents’ demographic data and the respondents’ self-reported data, it is possible to build up a rich picture of the viewers’ overall engagement with the advertisement in terms of both behaviour and underlying opinions. This data helps us to better understand the viewer. It helps us determine what marketing messages work for viewers and what marketing messages leave them cold. As part of a multi-modal marketing research study, eye-tracking allows us to determine if the viewers ‘get’ our marketing message. If the viewer does ‘get it’, eye-tracking studies will tell us why and if the viewer doesn’t ‘get it’, the visual behaviour analysis will give us the data we need to determine why the advertisement has failed.

Eye-tracking involves three important steps. These are:-

The study – for the results of the eye-tracking study to be valid, the study itself must be performed using a rigorous research methodology. What this means is that the study should be performed in a scientific manner. This is often a point of confusion as some people claim that eye-tracking is not a science but rather qualitative and subjective. This is both true and false. It is true that eye-tracking data can be analysed in a qualitative way. The analysts can draw subjective inferences from the eye-tracking data. However, the validity of these inferences depends upon the validity of the data upon which they are founded. In order for the data to be valid, it must be collected in a scientific fashion. Failure to do so will not only lead to validity problems with the data but will seriously undermine the validity of any inferences drawn from the data.

The Analysis – at its most basic level, eye-tracking data reduces to a series of ‘point of regard’ co-ordinates. For screen based test media, this can be a data file containing time-stamped screen co-ordinates of the tracking subject’s eye-gaze. This data needs to be analysed to gain useful insights from the study. What can be done? Well there are many useful eye-tracking metrics. For instance, it is possible to track every glance test subjects make on the product as and when it appears on the screen. To do this, the product visuals are tracked within the advertisement and intersected with the test subjects’ point of regard co-ordinates. This will allow the analyst to quantify the test subjects’ focus of attention on the product and monitor their level of attention over time. Basically, if a metric involves viewer’s focus on attention to media visuals, it can be used.

The interpretation – provided the eye-tracking data has been collected in a valid way and processed so as to produce useful information, the eye-tracking analyst will provide you with a rigorous set of data and metrics relating to the viewer’s engagement with the advertisement and highlight potential problem areas. The eye-tracking data will be complemented with test subjects’ self-reported data. Respondents will be questioned about problem areas within the media and their overall level of recall of branding information will be assessed. Where retention of key marketing messages is wanting, the analyst will review the respondents’ eye-tracking data to try to discover what went wrong.

Consider the benefits of running eye-tacking studies against prospective marketing campaigns before they are launched. The visual behaviour analysis could identify problems with a campaign which could be corrected before the campaign begins. This has the potential to make campaigns more effective and allow you to avoid the situation where viewers are watching your advertisement with little idea of what you are trying to sell.

Careers As a Research Analyst

A research analyst is one who prepares an analysis report based on the research that they convey of the market, product or any business and certain kinds of products or issues. Mostly, this research is done for the upper management in order to have a thorough view of the competitor’s market. The analysis report helps the company to recognize the opportunities in investment or a financial issue that they have.

Career as a Research Analyst

There is comprehensive growth of the research analyst through proper contribution and internal training and development. The career paths of a research analyst progresses as follows:

Research Analyst

Research Analyst is the entry level position where the subject mainly conducts market research at both the primary as well as at the secondary levels. Their analysis provides knowledge about the strategies and trends that have been functional.

Industry Analyst

Industry Analyst creates the overall presentation of the market research in order to evaluate and identify the growth processes. It is an advanced role and requires proper mastery of the industry. One who is an industry analyst should possess proper communicational skill in order to provide the presentation and they should also have leadership skills to excel in their specified industry. Participants in the industry analyst job have entrepreneurial thinking.

Research Director

The next step towards being a research analyst and an industry analyst is research director. The Research Director contributes to the entire management of all the different analysis of the industry by the industry analyst. The manage groups and multiple teams under them. This advanced position requires the candidates to be motivating ad proficient in all different forms of industry analysis.

Program Manager

The Program Manager forms the interface between the client and the research team. They take the primary responsibility to manage the analyst team to ensure the project quality according to the standard of the client requirement. They should meet the standards as well as generate the revenue for the development of the business.

Key Concepts

The research analyst career is highly rewarding in every country. It requires analytic power to properly distinguish the opportunities within an industry. Generally it asks for an advance degree in business, accounting or mathematics. One should have the standard knowledge and the basics about computer. As a part of the organization which makes such analysis reports one can take the opportunities to advance from being a research analyst to industry analyst, director or even program manager. You can advance to masters level or doctorate level if needed.

Marketing Research for NPD

Need meets Demand and Product meets the Needs – Products and concepts of innovative nature are difficult to be researched, owing to their intangibility. An experienced Researcher can help with this by bridging the gap between the new product development opportunities and the unmet needs of the buyer or the potential users by educating the Target audience and planting the seed for it.

Marketing research may be regarded as an experiment that can be unsuccessful if not conducted under the right and suitable conditions. Bottom-up approach of Needs Assessment and Concept Screening is more successful that the top-down approach of trying to fit and create acceptance of a new product or concept into the current market.

Concept Development to Product Launch – Market Research can be a part of the Product development at various stages from Egg implantation into the mother’s womb to the final Delivery of the baby.

Time is Money – Timely market research with high budgets can sometime prove much productive than a long-term but well-budgeted qualitative market research, because of an early launch and the first mover advantage.

Customer is the King – Retaining the existing market share and the users is very important and critical to an organisations health and wellbeing. Research helps in listening to consumer demands, invest in product development, innovation and improvement; and thus, make the customer feel important by being heard; which in turn rewards you with customer loyalty and an increased customer base.

Penetrating New MarketsQualitative Market Research helps find new markets for some old products or helps develop strategies for brand re-positioning or, rejuvenates the product life cycle by helping study the underlying needs of consumers.

Elimination of Ideas with no potential Returns – Research can help reduce the risks of potential hefty investments in future at a very nascent stage, by identifying the market and bouncing it off the identified target audience and focus groups. Thus, it can be a very strong reason to choose the right Market research organisation today… to avoid wrong turns and unseen accidents.

A Research Analyst is at the core of market research and has to use self-analysis, expertise and judgement; in addition to other qualitative research tools available for planning a successful launch of a New Product. These analysts act as moderators of an idea, rather than be a part of it at every step. They help testify, verify and put your beliefs on the right track.