Your First Trade
~4 min read
Researching Before You Buy
Do Your Homework
Before buying any stock, take time to research the company. Never invest based on tips from friends or social media alone.
Basic Research Checklist
- What does the company do? — Understand its products, services, and customers
- Is it profitable? — Check the EPS (Earnings Per Share) — is it positive and growing?
- Does it pay dividends? — Consistent dividends signal a healthy company
- Is it reasonably priced? — Compare its P/E ratio to industry peers
- What is the trend? — Is the share price generally going up, down, or sideways?
Where to Research
- Stockr — Stock pages with key metrics, charts, and financials
- Company annual reports — Published on the company or NSE website
- Business news — Business Daily, The Standard, Nation Business
- Broker research — Many brokers publish stock analysis reports
Start with companies you understand. If you use Safaricom every day, you already know a lot about their business.