Researching a stock before investing is essential, particularly in the fast-paced Philippine market. To promote well-informed decision-making, this method combines technical and fundamental examination. The following thorough methods will assist you in adequately analyzing a stock within the framework of the Philippine market:
Recognize the Business Firm Summary

To begin with, learn about the company’s business plan. Which goods and services does the business provide? How is money made from it? For example, SM Investments Corporation has various revenue streams from its retail, banking, and property development operations.
Place in the Market
Analyze the company’s standing within the sector. Is it the dominant player in the market, a budding star, or an underdog? For instance, JG Summit Holdings is a significant actor in the Philippine economy due to its substantial presence in several industries.
Stability of Finances: Income and Profitability
Examine the company’s revenue and earnings patterns over the past few years. Profitability and steady revenue growth are signs of strength. Use financial statements, such as the balance sheet and income statement.
Per Share Earnings (EPS)
Examine the company’s earnings per share (EPS), which shows the profit allocated to each share. Growing EPS is indicative of rising profitability.
Debt Amounts
Analyze the company’s debt levels. Excessive debt can be dangerous, particularly if the business experiences financial setbacks. The debt-to-equity ratio is a helpful statistic here.
Measures of Valuation
The ratio of price to earnings (P/E)
The P/E ratio can be used to determine whether a stock is overvalued or undervalued in relation to its earnings. P/E ratios should be compared to historical P/E ratios and industry averages.
The ratio of Price to Book (P/B)
The stock’s market value is compared to its book value using the P/B ratio. A lower P/B ratio could be a sign of a cheap stock.
Prospective Growth Market Trends
Examine the industry’s trends. For example, businesses like Ayala Corporation, which makes significant investments in both fields, may be impacted by the move towards digitization and renewable energy.
Plans for Growth
Examine the business’s goals for growth or the introduction of new products. Businesses with well-defined expansion plans, such as Globe Telecom’s 5G technology investments, have room to grow.
Fifth Dividend Yield
Partially Inverted History
Examine the company’s dividend payment history. Steady and increasing dividends may indicate a company’s financial stability.
Comparison of Yields
Compare the dividend yields of different firms in the same industry. Remember how long these payouts will last while a more significant income could be alluring.
Corporate Governance and Management
Team Leadership
Examine the company’s executives. Knowledgeable and experienced management can fuel the organization’s success.
Corporate Sphere
Effective corporate governance procedures are essential. In financial reporting, look for openness and compliance with rules.
Evaluation of Competition
Rivals’ Performances
Examine the company’s comparative advantage over rivals. For instance, evaluate Ayala Corporation’s market share and financial standing in comparison to other corporations, such as SM Investments Corporation.
Financial Metrics
Macroeconomic Elements
Consider general economic variables like GDP growth, inflation, and interest rates. These may affect particular industries and the market’s mood as a whole.
Governmental Directives
Keep up on legislative changes that may impact the business. Companies that invest in the renewable energy sector, for example, stand to gain from tax benefits.
Trends in Stock Price Technical Analysis
Charts can be used to study changes in stock prices. Recognize patterns, support and resistance levels, and trends that may hint at upcoming price changes.
Analysis of Volume
Examine the volume of trading. Strong investor interest may be shown by high volume during price increases.
Evaluation of Risk
Determine the Risks
Determine any possible hazards, such as market rivalry, modifications to the law, or economic downturns.
Strategies for Mitigation
Think about the steps the organization is taking to reduce these risks. Robust risk management plans tend to make a company more resilient.

Examining Globe Telecom as a Practical Example (GLO)
- Recognize the Industry: Globe Telecom, which offers broadband, fixed-line, and mobile services, is a significant participant in the Philippine telecom market.
- Examine Globe’s financial records to assess its economic health. Consider the rise in income from broadband subscriptions and increased data use.
- Valuation Metrics: To determine Globe’s valuation, compare its P/E ratio to comparable local telecom firms.
- Growth Potential: Consider Globe’s initiatives to enhance internet infrastructure and its rollout of 5G technology.
- Dividend Yield: Examine Globe’s payout record and contrast it with other telecommunications firms.
- Management: Evaluate the background and performance of the leadership group.
- Competitive Analysis: Examine how Globe stacks up against rivals like PLDT.
- Economic Indicators: Examine how the Globe is impacted by economic variables such as GDP growth and telecommunications-related government regulations.
- Technical Analysis: Examine Globe’s stock price patterns using stock charts.
- Risk assessment: Determine Globe’s risks, such as competition in the market and changes in regulations, and assess Globe’s risk management strategy.
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A multi-award-winning blogger and advocate for OFWs and investment literacy; recipient of the Mass Media Advocacy Award, Philippine Expat Blog Award, and Most Outstanding Balikbayan Award. Her first book, The Global Filipino Bloggers OFW Edition, was launched at the Philippine Embassy in Kuwait. A certified Registered Financial Planner of the Philippines specializing in the Stock Market. A recognized author of the National Book Development Board of the Philippines. Co-founder of Teachers Specialist Organization in Kuwait (TSOK) and Filipino Bloggers in Kuwait (FBK). An international member of writing and poetry. Published more than 10 books. Read more: About DiaryNiGracia
Acknowledgements
Please note:
The information provided in this financial analysis blog entitled "How to Analyze a Stock Before Investing" is for informational purposes only based on my study and research. Furthermore, personal research may also be conducted as information presented my change over time. While I strive to provide accurate and timely information, I make no guarantees regarding the reliability, accuracy, and strongly relies on time and availability of the economy at time of writing. Investments carry inherent risks, and it is essential to conduct your own research or consult with a licensed financial advisor before making any investment decisions. The views, opinions, and valued research and analysis presented are those of the author and may not reflect the official policy or position of any company or financial institution.
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