Even though you can learn a lot about a company
by studying its balance sheet and income statement, you may also
be interested in an analyst's breakdown of the stock's story.
What else is happening that could affect the stock's price?
Most reports include a summary of the analyst's
opinion, and some reports include detailed analysis of each factor
in the analyst's reasoning, with sections devoted to an analysis
of the industry, the company's strategy, or other factors.
Strategy: What's
the company's business plan? Are its products and services
competitive?
Consumer
market: Who are the clients? What is the company
doing to improve its marketing?
Development and planning: What new products or services are in the pipeline? Will the
company be making any major organizational changes or shifts
in focus?
Legislation: What's the likely effect of recent or pending legislation?
Management: Is the company well run? Has management made smart decisions
in the past?
Industry: Who
are the competitors? What factors affect the industry as a
whole?
Economy: How
will the company be affected by trends in the overall economy?
Although some investors and analysts rely more
heavily on the financial numbers and other quantitative measures,
you may find that the qualitative analysis — such as the
talent of the company's management, its marketing plans, or its
product development — is also important to your stock selection
process.
Sam Stovall,
Chief Investment Strategist at Standard & Poor’s
Sam Stovall, 
