If you have decided to enter in to the stock trade on a regular basis, you need to be a permanent student in the College of self-education, where your mind is your Principal, your initiative are your Professors and your hard work are your tutors. (No thanks) Research on the behavior of the stock market never stops, and one who thinks that one has drafted the final syllabus on this subject, is sadly mistaken. The Exchange throws up new challenges everyday, and solutions will have to be found out to the issues. Analysis and qualitative research on shares is a multi-dimensional subject. When you think that you have understood one aspect fully, another dimension of the issue will show up.



The procedure that you adopt for Stock Qualitative Marketing Research is important. How to analyze the stocks? Just because you see that the company is doing well, or you firmly believe that the company is going to do well, does not mean that you buy its share without the second thought. You are dealing with money matters that leave no scope for blind beliefs. You need to have the correct assessment, of its past, present and the future expansion programs. One important aspect is the fast technological advances that impact all segments of the industry. Some of the finest products of the company may become outdated due to the technological impact.

The analysis should broadly cover the following issues:

Examine how the company makes its money

Locate the sources of the finances of the company.

Study the prospectus for the future growth of the company.

Scrutinize the current price of the share; whether the quoted price is even, undervalued, or overvalued.

Research needs to be deep and not superficial. Do no rely on the general knowledge, but try to possess the specific knowledge. In this era of diversification, many companies are multi-product companies. Popular products of the company need not the maximum profit-giving products.

Now coming to the technical aspects, one needs to develop knowledge about the quantitative aspects apart from the qualitative aspect. Thorough understanding about the ratios will stand you in good stead to assess the market value of the share in comparison to its intrinsic worth. Know the price/sales ratio (the ratio of the stock price to the annual sales), price/earnings ratio (the ratio of the stock price to the annual earning of a stock), and the profit ratio of the company. Compare the relevant statistics with other industries in this segment. Get as much financial data related to the company and critically examine each part. Do a level-headed comparison, without giving scope for imaginings and the advertising gimmicks of the company.

Qualitative Marketing Research means you are aiming at perfection and go to the root of the issues to assess the correct price of a stock. Having done the paper work, now go to the area of survey. Know the opinions of the analysts and check what the recent growth rates in profits and sales are. If you can get hold of the assessment of the institutional investors, that will be a useful document for assessing the value of a share. The entire question relates to the judgment whether a particular share is over-valued or undervalued.

To arrive at the final decision, you need to analyze all the available data before you, by using your sixth sense. The final magical touch is more important than the mass of research. When you become the expert judge of the researched material before you, you are not afraid to take decisions. This is the best thing that can happen to an investor.

Remember? every rule has an exception. What is important is the application of the researched material to practical use. The figures should not confuse you; rather they should contribute to the profitable future of your portfolio.