magazine archive

magazine archive

First-time Investor

How to navigate an annual report (and why it is full of great information)

Thursday 17 Dec 2020

Each year every company listed on the UK stock market must publish its annual report and accounts on its website. These documents can be lengthy, even running to hundreds of pages, but they can also be a superb way to help gain a greater understanding of a business. In this article we will show you...

Engaging with companies via AGMs, investor events and more

Thursday 10 Dec 2020

In previous parts of this First-Time Investor series we have talked about how shareholders should consider themselves as a part owner of a business. By owning shares in a company, you have a voice and there are various ways you can engage with a business you are invested in. It is easier for big...

You should always study a company’s shareholder base

Thursday 03 Dec 2020

As a shareholder you are often one among hundreds or even thousands of individuals and institutions which also own a slice of a business. Many of these fellow shareholders will remain faceless or nameless entities but you can uncover the identity of the major shareholders in a company and there are...

The importance of company management when stock picking

Thursday 26 Nov 2020

Investor Warren Buffett once said ‘I try to invest in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.’ He was referring to newspaper businesses in the 1960s where often a single dominant title held a monopoly position, which meant the economics were...

How much debt should a business have?

Thursday 19 Nov 2020

When it comes to our own finances we typically see debt as a negative but the reality is more nuanced. Most of us would not have been able to purchase a home without a mortgage and yet running up unpaid bills on credit cards could leave you swamped in interest payments. For businesses too, the use...

Cash flow is a figure that can’t be fudged

Thursday 05 Nov 2020

In the latest instalment in our first-time investor series, we outline the importance cash flow plays when weighing a company’s financial health and future prospects. ‘Cash is king’ is the oft-quoted mantra of entrepreneurs and investors alike. The reason is the cash a company generates cannot be...

Using return on capital employed to identify quality stocks

Thursday 29 Oct 2020

In previous parts of this series we have looked at a range of valuation metrics, many of which are a good starting point when researching a stock. To delve a little deeper into a company’s genuine worth there is merit in reaching for a measure that is often employed by fund managers and investment...

How to calculate enterprise value and when to use it

Thursday 22 Oct 2020

Enterprise value (EV) is often underappreciated by investors who tend to focus on the market value of a company. It is arguably a better way to value a business than market capitalisation (also known as market cap) because it takes account of debts, preferred shares, minority interest and cash. Put...

Price to book can be a good way to value banks and housebuilders

Thursday 15 Oct 2020

There are different ways to value companies such as price to earnings and price to earnings growth . Particularly popular among value investors is the price to book metric, enabling individuals to screen for companies trading on a discount to the value of their assets. It has historically been the...

Using the PEG ratio to find growth at a reasonable price

Thursday 08 Oct 2020

The price-to-earnings (PE) ratio is a great starting point for beginner investors looking to get to grips with the valuation of companies listed on the stock market. However, it has big limitations. It won’t, for example, give you any idea on the trajectory of a firm’s earnings. THE PEG RATIO A...