How to Write a Stock Analysis Report

Stock analysis reports help investors make wise decisions.

Playing the stock market can be a potentially lucrative endeavor. If you lack the requisite knowledge of a stock in which you plan to invest, however, you could just as easily lose big as earn a bundle. All stock investments are risky, but by carefully selecting a stock with a proven track record, or one that holds a favorable market position, you can increase your likelihood of benefiting from your investment. One of the easiest ways to gain information about a stock is to read a stock analysis report. These reports are favorites of investors because they provide an objective analysis of a stock. To compose such a report, you must ensure that you explore an array of stock success indicators.

Instructions

1. Introduce the stock, explain the industry in which the stock belongs and describe the company as a whole. Before you can actually analyze the stock, you must describe it. Give information such as when the stock first became available for trading, what company the stock represents and what industry that company predominantly operates in.

2. Provide a brief history of the stock's performance thus far. While stocks can deviate from their previous trends, exploring the history of a stock can help you see how the stock may do in the future. Review the stock's performance history over its lifetime, and discuss the high and low trends that it has experienced.

3. Describe the overall volatility of the stock as a whole. Some stocks are relatively stable and gain or lose value slowly, while others rapidly climb and drop in share value. Characterize the described stock as volatile or stable to help investors determine how safe their investment will be.

4. Discuss market trends that directly impact the stock. Explore the market as a whole, and consider what current events are likely to impact the stock in question. If the stock is, for example, an alternative energy stock, and stocks of that type are generally gaining in value, it speaks highly of this stock's potential.

5. Make a recommendation. Many people shy away from making a recommendation because that recommendation is, at best, a guess. But most readers want such a recommendation. Look closely at the data you have collected, and make as sound a recommendation as you can based on the numbers and facts that you have.

References

• Blackwell Publishing: Preparing a Security Analysis Report
• Vestor Vest: Stock Picks Analysis