How To Pick Quality Shares provides a three-step process for analysing
company financial information to find good investments. The three steps
boil down to finding quality companies, avoiding dangerous or risky
companies, and not paying too much for companies' shares. Applying the
in-depth techniques described here will give investors a better
understanding of companies, and an edge over other investors, including
professional investors and analysts.
Phil Oakley, an experienced investment analyst and private investor,
guides the reader step-by-step through these three stages:
- For the first step, he shows how to identify the kind of high-quality
companies that are capable of being profitable investments over the long
term. Important themes are how much a company earns on the money it
invests, reliable measures of profit and the importance of cash flow.
- Next, he shows how to spot the dangers and risks that could lead to a
company being a bad investment. Here the focus is on how to analyse
debt, in particular hidden debt and pension fund deficits.
- Lastly, he shows how to value a company's shares and determine what
is a reasonable price to pay to invest in that company. Phil shows why
some common shortcuts to valuing shares are not very useful and how to
use cash profits to value shares more reliably.
At each stage, Phil explains where the investor needs to look in company
financial statements to get the information they need and how to analyse
this information. Illustrative examples of analysis of real company
financial statements are used throughout. If you have a company's latest
annual report and its current share price you have all the information
you need to be a successful investor. How To Pick Quality Shares shows
you how.
