After I have concluded that a specific company complies with my preconditions for selecting undervalued stocks, I will elaborate my stock investment analysis further, to assess the quality of it’s assets, management, financial statements, etc.
Thus far I have created the following pages in this due diligence chapter:
- Institutional Ownership Assessment – How I Assess the Shares Owned by Institutions. In this institutional ownership assessment, I reveal how I assess the change in the institutions’s stock holdings between the two most recent periods.
- Management Compensation Analysis – 2 Ways to Determine if Management’s Compensation and Benefits Are Reasonable. For my management compensation analysis, I calculate various revealing ratio’s to determine if management’s compensation and benefits are reasonable.
- Management Compensation Comparison – Does Your Stock’s Management Rewards Itself Excessively. In the management compensation comparison, I compare management’s compensation with the compensation paid at other relevant and similar companies.
- Management Compensation Evaluation – How Does the Change in Compensation Compare to the Performance of Your Stock’s Share Price. In the management compensation evaluation, I compare the change in management’s compensation to the change in the company’s share price.
- Shorting a Stock – How I Determine if a Short Squeeze is Likely. In this article about shorting a stock, I have categorized the outcome of the three most important short interest indicators into low risk, neutral and high risk.
- Stock Options and Warrants – Why You Should Pay Attention To the Exercise Price. Read this article to find out which stock options and warrants are in-the-money and how much cash will be raised when these are converted into common shares.
When I concluded that the company does comply with my preconditions, but – based on the further elaboration of my stock investment analyses – I determined that company doesn’t deserve a position in my stock portfolio, I will add it to my stock watchlist, so that I can monitor the developments within that company closely.