Before I consider investing in any stock, I go through a detailed multi-stage checklist. This framework is based on real-world experience with institutional behavior, insider transactions, and fundamental business analysis. Every company I review is assessed on the following points:
1. Basic Company Information
- Company name and ticker
- Sector / industry
- Country of registration
- Market capitalization
- Current price and historical high
2. Financial Health
- Most recent earnings (revenue, net profit or loss)
- Debt levels and maturity dates
- Free cash flow availability
- Business profitability and margins
3. Insider and Institutional Activity
- Insider buying or selling (Form 4 filings)
- Hedge fund involvement (13F filings, major holders)
- Entry points and volume of institutional positions
4. Leadership and Management
- Names, age, and background of board members
- Past achievements and relevant experience
- Any red flags related to governance or credibility
5. Product and Market Position
- What the company actually sells or produces
- Uniqueness or competitive advantage
- Presence of real market demand
- Political or subsidy support
- Market competition and differentiation
6. Share Structure and Dilution Risk
- Any recent dilution events or offerings
- Upcoming S-3, ATM, or SPO plans
- Insider ownership vs. public float
- Risk of price drop due to capital structure shifts
7. Seasonality and Market Triggers
- Seasonal demand patterns
- Upcoming catalysts (earnings, product launches, news)
- Potential external triggers for growth or decline
8. SWOT Analysis
Strengths
Examples: Strong leadership, government support, scalable product
Weaknesses
Examples: Recurring losses, dilution history, inconsistent strategy
Opportunities
Examples: Entry into new markets, rising demand, ESG momentum
Threats
Examples: Regulation, macro risks, aggressive competitors
9. Entry Price and Risk-Reward
- Current stock price in context
- Upside potential and realistic profit target
- Price floor or technical bottom
- Risk of correction or retracement