It's nice to see your interest in the marketing and investment world!
Allow me to break down some points for you.
Personally, i usually don't recommend entrepreneurs jumping right into stocks but if they persist, this is some of the information I'll provide.
To begin with. You never want to buy a stock strictly on their previous success and profitable gains. When you're purchasing stocks you're purchasing a business. You're not looking for all the gains of a particular stock, you're looking for the future growth of the company. In simpler text, because a stock has gone up $00.75 or $2.00 in the past several weeks doesn't necessarily mean the stock is a safe investment. Most businesses 1-3 year term have profitable stocks but that's it, that's short term investing, slightly profitable but not career investing.
While looking for a stock to invest in you're first objective should be finding out the companies 10k; the annual document submitted by the company's accountants, available to the public. This is going to tell you where they are getting their money from, compare their numbers to previous years and determine whether business has improved or decreased in recent cycles.
Next you're looking for the companies ratio. It's ratio is determined by dividing the company's current assets by the current liabilities. If the company has a ratio -1.00 or 1.05 you want to stay away from it. The current ratio assures that a company is able to pay off any short-term liabilities with liquid assets such as cash, inventory, accounts receivable or other short-term assets. However, because a company has a higher ratio doesn't necessarily mean it's better. A safe, solid, trustworthy ratio is two - three.
Next you want to examine the history of paying dividends. This is the basic "make or break" while looking for stocks to invest in. While investing you have to remember, there are companies that make millions, billions, each year and increase their stocks but never return any of that to the shareholders. Then there are those companies that make medium profits, have a steady stock and always pay out to their investors. Just because it's a wealthy company with high stocks doesn't necessarily they have to pay out.
Remember, generally in new businesses all of the above are overwhelming. It's hard investing in a new company. They generally start off very popular for the first three years then die down. Make sure you have very high accessibility to the companies information. That they do, how the economy feels about it, can it be replaced with a machine in a few years, will something else replace the technology, etc.
Remember, when looking you're looking for how many sales the company does per day, per week, per month, per year, per five years. The debt of the company. The total earnings of the company and the equity, which should be higher than every pervious year. The equity should be 10% higher than previous years to determine the success of the business.
That basically sums up what you're asking i believe, typing this on my phone at work.. Haha, can't review the question. If you have any more information you wish to accumulate you can reply here or PM me.
