It's definitely worth a visit to the company website. Reading the press releases will give you some of the most up-to-date information available. Also, it may be useful to see how a company does business on the Web.
Setting up a watch list
Now, it's time to set up a watch list, which can help you keep tabs on company news and easily find stock price information. How do you do this? Fortunately, Morningstar offers these services for free:
- Go to the Morningstar.com and click on the tab labeled "Portfolio"
- In the Portfolio Manager window, under "Create a Portfolio," click "New Portfolio."
- You'll see a box labeled "Step 1." It's automatically set up to build a watch list, so click "Continue."
- Pick a name for your portfolio, or just call it "watch list." Then, plug in the ticker symbols of the companies you want to watch. Click "Done."
- In the following window, you'll see a list of updates, alerts, and tips that Morningstar will send you daily for the companies in your watch list. Click "Done" again.
- Now you have a watch list that you can visit anytime by clicking the Portfolio tab on Morningstar.com.
By creating a watch list, you'll be able to set alerts to notify you when a stock price has met or exceeded a particular threshold. Thus, your watch list will eventually become an integral tool in helping you make buy and sell decisions, stay organized and keep informed.
Seeking out expert opinions
While your investing decisions are yours to make, you might be able to gain a new insight or angle by reading others' research.
Obviously, we think a subscription to Morningstar.com's Premium Membership service, which would allow you to read our analysts' opinions, is one worthwhile resource.
Avoiding information overload
You shouldn't feel badly if you can't read every article from every source that comments on a company you're researching. In your journey to becoming an informed stock investor, you'll almost inevitably feel overwhelmed from time to time. Fortunately, you don't need to read it all to be successful. Information won't harm your performance. But paying attention to some of it might. That's why we've highlighted the key pieces of information you will need to make an informed decision.
Here's a quick step-by-step guide to becoming informed about a company:
- Obtain the firm's 10-K and really try to give it a thoughtful read. Don't feel badly if you spend a lot of time on this step. (Give it a couple of days to digest.)
- Read through the 10-Qs when they are released each quarter. These are usually much shorter than the 10-K and shouldn't require more than an hour or two of your time.
- Set up a watch list to organize the steady flow of news on all the companies that interest you.
- Poke around on the company's website. This takes less than a half hour.
- When time allows, visit relevant industry websites and catch up on some of the industry trends.
The bottom line
If you follow these steps, you'll be able to form a foundation of understanding about a company. Over time, you can build on your foundation and gain a much deeper understanding. Further, you'll be able to weed out the news that just isn't worth your time.
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Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
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