Process
- What drives revenue?
- Where is the industry headed?
- How does management think of the business?
- Competitive positioning:
- How does the market see my target?
- How do competitors see my target?
- How do customers see my target?
- Management
- Incentives: over what horizon?
- Decision-making: capital allocation
- // Review
- Financials
- 5-7 years analysis
- Model
- Growth
- Returns
- Cost of Capital (Discount Rate / Required Return)
- Risk: macro factors, industry/company factors
Considerations
- Company / why market is wrong
- Catalysts
- Upside %
- Downside %
- What do you not know?
Important Factors of Consideration
- Timing inflection points
- Understand risk / reward scenarios
- Determine appropriate cost of capital (required return) for the risk profile of the investment
- How stock moves with market/macro/micro news
Link to Article: http://www.wallstreetoasis.com/forums/on-the-job-with-simple-as%E2%80%A6-my-research-process