Homework Help

What factors should one consider before buying shares in a home improvement company?

user profile pic

yaga49 | (Level 1) Valedictorian

Posted December 6, 2012 at 3:30 AM via web

dislike 0 like

What factors should one consider before buying shares in a home improvement company?

1 Answer | Add Yours

user profile pic

thanatassa | College Teacher | (Level 2) Educator Emeritus

Posted December 6, 2012 at 3:49 AM (Answer #1)

dislike -1 like

The first factor an investor should consider is whether s/he can is in a good financial position to buy stocks. A person with any sort of debts which charge greater interest than the current return in the stock market should pay off debts before buying stock.

Next, an investor should look at overall economic trends, including that of equities. If the overall economy remains stagnant, equities are not an ideal investment.

Next, one examines the company, including price/earning ratio, market share, growth, corporate governance, and liabilities. Another thing to look at is competition. Is the given company increasing its market share? Is it positioned to compete well on price? Is it innovating at the rate of its competitors?

Join to answer this question

Join a community of thousands of dedicated teachers and students.

Join eNotes