Stock investing checklist – Are you using one yet?

In this article I will share a useful stock investing checklist. In the previous article I wrote about using a checklist for investing and how it can save you from avoidable mistakes. We will dig deeper into stock investing in this article.


  • The important thing to keep in mind is that a checklist is not static.
  • Every person’s checklist will be different based on their investing style and abilities.
  • We need to keep improving our respective checklists.

I will definitely keep my eyes open on new points that I need to add or some that I need to remove in my checklist and so should you.

Here is the stock investing checklist that I use presently.


1.  What is the business?
2.  What is the company’s bargaining power with suppliers?
3.  What is the company’s bargaining power with customers
4.  How is the company placed against competitors?
5.  What is the market share if data is available?
6.  Is the company innovative? Does it work on adding new product lines or service lines?
7.  Is management compensation reasonable or too high?
8.  What are the sustainable advantages or moats that the company enjoys?


9.  What are the factors that affect this sector?
10. What are the prospects for this sector for the future?


11.  Is return on equity at least 20%? What is the trend in return on equity over the last 5 years?
12.  Does the company manage working capital efficiently?
13.  What is the company’s dividend paying history?
14.  What is the dividend yield?
15.  If it does not pay dividends, is the company making good use of the retained earnings?
16.  What is the amount of debt as compared to equity?
17.  What are the growth rates of sales, operating profit and net profit in the last 5 years?
18.  What is the amount of free cash flow in each of the the last 5 years respectively?
19.  Is the operating cash flow at least equal to net  profit?
20.  Is net profit growth matched by EPS growth or is growth at the cost of dilution of equity?
21.  What is the trend in operating and net margins respectively over the last 5 years?

Growth Analysis

22. What are the company’s growth plans?

Risk factors

23.  What are the risks that this sector faces?
24.  What are the risks that this company faces?


25.  What is the valuation in terms of price-earning ratio / price to book ratio? How does it compare with historical  ratios respectively?
26.  What are the results of the discounted cash flow analysis (DCF)?


27.  Where is the market right now as compared to long-term averages for valuation?

Emotional factors

28.  How confident am I about this investment?
29.  If the stock price dips by 25%, would I still invest more money into this stock?
30.  Do I see any biases affecting my judgment?


If you have any important points to add, please do so in the comments so that others may benefit.

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  1. Abhishek Sharma says

    Dear Kunal,

    Thanks a lot for sharing this. It would guide one in a better way to make on’es own checklist.

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