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Investors tend to look at things like takeover rumors when trying to pick a winning stock. More often than not, however, those rumors are iust that. Here are some more reliable guides to a company’s bright future: 1) More than one insider is buying. lnsid ers aren’t always right, and they’re often way too early. But if more than one insider is giving your stock a vote of confidence by making a large purchase, it improves the chances your stock will outperform in the long run. Look at the size of the insider purchases, though. Small purchases may not be meaningful and may even be done in an attempt to influence share price. Also, consider the position of the insider In the company. The higher the individual, the more promising the purchase. 2) The company is buying back its shares. With fewer shares available supply goes down, wlich raises demand for your stock. It also indicates the company’s confidence In lts future. 3) Earnings are Increasing. More than anything else, earnings drive share price. Steadily increasing earrings are therefore a very positive sign. Be sure that you believe in the sustainability of those earnings, though. When a company is growing too fast, it can't possibly continue the performance indefinitely. When growth slows, share prices may fall fast and hard. 4) inventories are declining. When a company ships its product as fast as it stocks it, it’s a very good sign that demand is increasing, which bodes well for future earnings. 5) The company ls paying off debt. Often, new companies take on more debt than they should in at effort to expand their marketplace presence and buy needed equipment. When they begin to pay it down, it’s a good sign that their gamble is paying off. 6) The company has a moat. When a company has a surefire way to keep competitors away, it’s likely to be a long-term winner. Some companies have a moat by virtue of a brand name that is so well-known that no competitor can easily make inroads visit: Best Stock Market Tips
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