When it comes to stock picking the best stocks in the stock market, investors will use techniques such as fundamental analysis or qualitative analysis to make sure that the company they are investing in is worth the share price. Even if you have a broker who gives you stock tips and stock picks, it is important that you also know what to look for in a company. That you can perform your own fundamental analysis. Making sure that a company is in good health and has the possibility to grow in the long term is important if you are looking to invest in its shares.
Qualitative analysis looks at the who, what, where, when, and why of a particular sample of data. It also looks at the management of a company it seeks in order to establish the competencies and professionalism of those at the head of the company. You want to know who are the CEO, COO, CFO and CIO of the company. Once you have established who is at the top, the next thing to know is where they have come from. Finding out about their educational backgrounds, what certificates or qualifications they have, and then looking into their employment history. Once you have researched all this information, you can then decide if you feel these people can manage the company appropriately. This is important when looking for the best stocks to buy into.
Consider what the management’s philosophy will be for the running of the company. Different styles of management will produce different results. See if the style they use will make the company transparent and flexible, or if it is a more rigid style following policy and logic when it comes to the decision making process. Once you have looked at the “what”, you can focus on the when, like when did management come into play in the company, and when were changes seen in the company’s performance. Using technical analysis and stock charts, you can look at past data and identify performance changes in the company through the movement of share prices. Some of the best stocks in the stock market today are from companies with a good competent management team.
Finally, look into why the management is in the position they hold. Did they arrive there through promotion, or did they take the position through an inheritance or through questionable means. By using qualitative analysis, you can look at any sample of given data. In this case, it was about management. However, you could use the same questions on the financial data of the company or any other aspects. Using different analysis will help you to find the best stocks for your portfolio, and increase the likelihood that you will profit.