How Can You Learn About Publicly Traded Stocks?


Quick Answer

Researching publicly traded stocks involves reading the required public disclosures public companies must file about their finances, as well as looking at past economic data for trends. Many of the documents that provide valuable data about companies can be found on the company's website for free.

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Full Answer

Each year, companies file annual reports that detail the performance of the business in the previous year. These typically come in two varieties: a 10K filing required by the Securities and Exchange Commission and an annual report for the company's shareholders. Not every company files both, but the 10K filing is a requirement for being publicly traded. These documents provide a wealth of information about the company's financial situation for shareholders or potential shareholders, but they can take some time to read and analyze.

Those interested in investing without putting in the hours necessary to analyze 10K filings can subscribe to financial analyst services. These companies crunch the data for investors and provide not only analysis of the current year's reports but also data for past years. These services can help highlight important figures like debt and equity ratios, return on equity investments, and profit margins that can give clues about the relative financial health of a company. Morningstar, S&P and Moody's are examples of companies that provide stock analysis for customers.

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