When you want to invest in a company's stocks or bonds, you can find tons of analyses and recommendations online or elsewhere. The problem is that you often can't trust most opinions because everyone has their own interests, and those interests might not be yours. Even your personal advisor might be receiving a commission from an asset manager or bank for selling you their products, which may not be the best for you.
Image AI
So what do you do in a world where it seems you can't trust anyone? Well, it's not entirely like that, but you should follow the maxim: trust, but verify.
So the first thing you should do is use official sources, whether from the company or the market. They're not perfect, but they're the best you can find. And you should focus on four key points, since you won't be able to cover more unless you have all the time in the world. Which isn't my case. The first would be profitability, and for that, you can use ratios like ROE. The second factor would be growth, which can continue with the evolution of sales or gross profit, depending on the company. The third is solvency, very important if you're a bond investor. And finally, momentum, which is more difficult to assess but can be seen by observing the sector's performance on the stock market. Something like what's trending. Right now, AI companies have the most momentum.
With all this, you can get an idea of whether the recommendation you've received is good or better to pass on it.
Disclaimer.
This is not a purchase recommendation. I am not a regulated financial analyst. Under no circumstances should this information be construed as a recommendation to buy, sell, or hold a position.
You should be aware of the risks involved in investing and conduct your due research.
The information described here may not be accurate or may change at any time, so you should always check it.
