Company information sources
A company's annual report and the annual results presentations are publicly available documents. You could look for them on the ASX website or the company website. These documents include the financial results, and usually summarise an internal review of how things went, and their view to how things could develop in the future. Did they make a profit? Are profits and or expenses growing? You can gauge if the business outlook is aligned with your investment goals and objectives, and whether their outlook aligns with your understanding of the macro environment. Are there long-term trends shaping the sector, such as technological innovation, demographic shifts or energy transition? You could also look at previous years’ reports to see whether they delivered on what they promised, which can show a proven track record.
Company alerts
Australian Stock Exchange (ASX) rules require certain information to be released to the market. This includes, but is not limited to, financial results, takeovers, appointments and instances where senior leaders buy or sell shares, changes in major shareholders, or if a company is added or removed from an index. These are significant disclosures that can impact the company, how it’s viewed, and therefore, its share price.
Independent research reports
Independent research reports (reports) could help validate your thinking or highlight other risks or opportunities for you to consider, for example:
- Strengths and weaknesses,
- Competitive advantages,
- Whether the company has something unique, like strong branding, patents, or market share, that sets it apart,
- The business model: How does the company make money? Is revenue diversified or reliant on one product or market?
- Challenges: Are there risks such as regulatory changes, supply chain issues, or heavy reliance on a single product or customer?
Reports may be provided by your broker, or you can choose to pay for a subscription from a research house. Reports can provide the researcher’s opinion of the company, and may include a buy, hold or sell recommendation. These insights can help you understand if a company is well positioned within its industry.
Comparing companies in the same industry
Comparing companies within a sector can highlight differences in valuation, profitability, or risk. Useful measures may include:
- Dividend yield: The historical dividend over the current share price.
- Earnings per share: The net profit over the current share price.
- Price to earnings ratio: The current share price over the earnings.
- Debt levels: Debts over assets.
These measures could uncover an opportunity or market perception that may help you with a decision to buy. The numbers often tell a story, for example, do the valuations make sense compared with peers? While past performance isn’t a guarantee of future returns, it can still provide a useful perspective.
You might then look at qualitative factors such as the leadership team, how long have they been in place (for example, across several economic cycles), and whether they are delivering on their stated promises and strategies. Also consider how the share price has performed over the past one, three and five years.
These are just some research options that could help you evaluate your investment choices. Understanding risk doesn’t mean avoiding it, it means deciding whether it fits your risk tolerance and goals. Researching can help you feel more confident about your investment decisions, whether to choose to buy, hold, or sell. Investing isn’t about predicting the future perfectly; it’s about making informed choices based on information aligned to your personal goals. You could start with these steps, keep learning, and remember investing is a journey, not a race.