Simon Thompson's guide to successful stock picking

Simon Thompson's guide to successful stock picking


Over the years, I have been asked hundreds of times by Investors Chronicle readers how I go about uncovering the dozens of undervalued small-cap companies that find their way into my weekly column and my annual Bargain Shares portfolios.

I am more fortunate than most as I had a head-start in the finance world a quarter of a century ago when I was taught how to rip through a set of company accounts. But being able to analyse a company's accounts is one thing; being able to decide whether shares in a company are a good investment is a different matter entirely.

So when I screen for the best investment opportunities for readers of Investors Chronicle, I go through a methodical process on every single company I research in order to have the best possible chance of making a profitable trade.

This involves considering 10 key areas before deciding whether the risk:reward favours making an investment. These 10 steps are outlined below.




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