Learn how to compare stocks to buy and stop losing money in the market! This is where I get to show you how I picked stocks working as an analyst, how I compared stocks to invest in only the best of the best.
There are two ways to compare stocks and this is going to be extremely important in making sure you invest in the best. First is you can compare the company’s financial ratios against others in its own sector or industry.
Remember, the stock market and really the economy, is categorized into sectors or groups of companies that serve a common purpose.
So you absolutely have to measure companies against others in the same sector or industry and while you’re doing it, you want to ask yourself three questions.
First are most of the ratios better or worse in one stock compared to the other, does one company have a clear advantage?
Second, is the advantage consistent over a long-time, does it come from a clear competitive advantage. And third, is that advantage already reflected in the stock prices?
After looking at a few consumer staples companies, we decide we want to look a little closer at Kimberly-Clark, ticker KMB, and Colgate-Palmolive, ticker CL.