With so much data available about Microsoft (MSFT), where should you begin if you want to analyse the company? With this in mind, we’ve compiled tool links that you can use to dig deeper. In addition, we’ll provide some guidance on a few financial concepts.
analyse the Company’s Growth Prospects
If a company starts increasing the size of its workforce, it may be anticipating a rebound in sales. That’s why it’s a good idea to chart a company’s employee numbers (can be a great indicator of future growth prospects).
The chart below shows the change in employee numbers at Microsoft over the last 10 years.
Key Questions to Ask: Is the company hiring or firing? Rising employee numbers might signal growth opportunities, but smaller workforces might end up being more efficient.
What do Wall Street Analysts Think of the Stock?
When Wall Street analysts research a company, they usually release a “Sell”, “Hold” or “Buy” rating on the stock.
To arrive at the “average analyst rating”, Zacks Investment Research surveys all the analysts following a stock, and averages their recommendations to arrive at the group consensus.
The Compar-O-Matic offers an easy way for you to compare the average analyst rating of Microsoftagainst its biggest competitors.
Of course, the chart below only shows a snapshot at a point in time. If you want to see how a company’s analyst ratings have changed over time, press the Play button.
Key Questions to Ask: Do you trust the opinion of Wall Street experts? They don’t always get it right, but their opinion could offer an interesting starting point for your own analysis.
How Big is the Company Relative to Competitors?
Market cap is the public’s perception of a firm’s total value, calculated by multiplying the company’s total number of shares available for trade by the price of each share.
In general, large-cap companies (bigger market caps) tend to be less risky than small-cap companies (smaller market caps). So, if you’re worried about taking too much risk, try to focus on the bigger companies.
The Compar-O-Matic makes it easy to compare the market cap values of various companies over different periods of time. Once you start comparing the size of various companies, be sure to click on the “Play” button below the Compar-O-Matic.
Key Questions to Ask: After you press the “Play” button below, pay attention to the fluctuations of a company’s market cap over time. Is the company’s value fluctuating more than the competition? If it is, it may be a signal that the company is a riskier investment.