Lesson - 5 Find Stocks to Research

Here is a list of 20 companies that follow some of the rules we've been talking about.
These companies might all be great to buy or they might all be bad investment. But now that we have a list we can dive a little deeper. The goal is not to invest in all these companies, but to find the best investments to invest in.

These companies all have 3 things in common.

1. They all can pay their bills with cash
"Quick Ratio is Over 1"

2. They all should double in value in at least 5 years with current earnings
"P/E ratio is under 5"

3. They all pay a dividend
"Dividend Yield is Greater than Zero"

No.	Ticker	Company
1	AEA	Advance America, Cash Advance Centers Inc.
2	APAGF	Apco Oil & Gas International Inc.
3	BCF	Blackrock Real Asset Equity Tru
4	BCO	Brinks Co.
5	CEG	Constellation Energy Group, Inc.
6	DIT	AMCON Distributing Co.
7	ELNK	EarthLink Inc.
8	GLT	PH Glatfelter Co.
9	IIG	Imergent Inc.
10	ISH	International Shipholding Corp.
11	NE	Noble Corp.
12	QCCO	QC Holdings Inc.
13	SAY	Satyam Computer Services Ltd.
14	SB	Safe Bulkers, Inc.
15	SGU	Star Gas Partners LP
16	SLT	Sterlite Industries (India) Ltd.
17	SNSTA	Sonesta International Hotels Corp.
18	TRMS	Trimeris Inc.
19	UFS	Domtar Corporation
20	USMO	USA Mobility, Inc.

Lesson 4 - Research Dividend Payout History

1. Go to Google Finance
2. Type your Ticker Symbol in the search bar
3. Look at the 5 year chart and you should see
all the dividends this company has paid in the
last 5 years.

Lesson 3 - Researching Investments

4 basic steps to picking stocks to research

Lesson 2 - Ratios

Debt/ Equity

A ratio used to measure financial leverage. This is calculated by dividing liabilities by stockholders equity. This is a good indication of how much equity to debt a company is using to finance its assets. A company with debt/ equity less than 1 shows a higher equity position than debt. This is good.

Return on Equity

A ratio that measures the profitability of shareholder investment. As a owner of stock or a potential owner of stock in a company it is a good idea to see what the return would be on your investment. This is the number.

Insider Ownership

This is a interesting measurement. This number tells you how much a company is owned by management. The higher the number the more company management owns. If this number starts to decline over time it might be the right time to re-evaluate your stockholder position because management is selling ownership.

Lesson 1 - Ratios

P/E = Price to Earnings

A ratio used to value a company. It takes the current price of a stock and the earnings the company has gained over the trailing twelve months. This ratio tells you roughly how many years you must hold the stock before you see a 100% return on your investment. The Danger is if the P/E ratio goes to zero then your screwed.

P/B = Price to Book Value

A ratio used to compare its stock price to the company's book value based on the most recent quarter. If the P/B ratio is lower than 1 you will find the company to be undervalued. Meaning the book value is greater than the stock price. This is a good sign when looking for a stock on sale.

Quick Ratio

This ratio is a good determination of a company's short term liquidity. Meaning, does the company have money to pay its bills without selling inventory or in other words pay with cash or some other very liquid asset. The higher the quick ratio the better position a company is in. Example: If the quick ratio is above 1 then the company can pay all of its bills at least once with cash that year. This ratio is based on the most recent quarters analysis.

How to Invest

How Do I Invest?

"How do i invest?" is perhaps the easiest question to answer. When people invest money they usually do it with a Stock Broker. Different places to invest through provide a variety of uses. Although people might believe E-Trade is better than Scottrade or Ameritrade is better than TradeKing, I only look for the company who provides the lowest cost of a trade. The higher the price to trade the more gains your stock must make just to break even. Low cost trading is what I would promote.

I teach safe investing principles that will help you trade with less risk and more comfort. This is why I only care about who has the best price to trade.

Where to Invest

Where should I put my money?

This is perhaps one of the most debated questions in the investment world. Everyone thinks they have the answer and some people test and retest their hypothesis trying to prove new ideas. I have one phrase in rebuttal.

"A Penny Saved is A Penny Earned"

- Benjamin Franklin

This is true and always will be. We don’t invest in overvalued business, we don’t invest in business that can’t pay its bills, we don’t invest in business that has no structure or plan, and we don’t invest in business that spends their money before they earn it. We invest in business who follows what our grandmothers have taught us about a penny saved is a penny earned.