While, before buying a stock, it is essential to analyze the stock technically as well as fundamentally. When you are buying a share of certain company, then you need to keep track of following factors of the company.
Each one of us must know the external environment in which the company operates, in order to know the prospects of a company. Also one should be able to assess the parameters like the size of the industry both domestic and global. Investors must look the import-export scenario of the company that indicates the potential for the company. Likely, you need to understand the industry growth stage along with the changing trends and intensity of competition.
Another important thing that you need to know is company’s position. You should identify the assessment of a company’s positioning as it let you know about how well it is placed within the industry and its strategy to achieve long-term goals. You must understand the target segments of the company in terms of geographies and demographics when evaluating a company’s positioning. Also one should find whether it caters to business or directly to consumers. Definitely it will let you know about the competitive advantages of the company and provides insights into the appropriateness of strategy in achieving its stated long-term vision. By simply knowing this you will also identify the challenges that the company is likely to face while pursuing its growth strategy.
Knowing the Quality of management and corporate governance is third prominent factor. One should know that how the company qualifies on integrity. Some of the corporate governance practices are like disclosure norms, transparency in reporting, board practices and quality of discussions, the profile of board members and independence of the board.