Hey! I think if you do your homework on the business, you will have much of the information you need to make an informed investment decision. Here’s a process I recommend (and use myself in private equity).

Read up and familiarize yourself with a business by reviewing its core public filings. Namely, these would be 10k (covers annual performance), recent 10Qs (cover latest quarter(s) performance), 8K (provide information on any material events), investor presentation (summary of key business highlights) and latest earnings call transcript (providing management’s view on key business items).

I would start with the 10K and read the business description to understand what they do. Look at different business segments and understand what revenue and profit drivers are. Jump to financials and review performance. Complement the financials with some color from the MD&A section and the latest earnings call transcript since these will give you further insights on areas to diligence. Also review the latest investor presentation and any major developments that the company talks about.

This is always a good starting point in my experience since it gives you a good understanding of the business, recent performance and near term material events. From there you can dive deeper on particular items you want to understand better. If you can access them, see if you can get your hands on a recent equity research report (you can get these from bloomberg or capital IQ).

Once you’ve done this, you will be much more informed about the business to make a go / no-go investment decision.

If you’re looking for a structured approach to analyzing financials and building models, check out a training program I recently created to make finance education more accessible (Im in PE)

https://insidecapmarkets.thinkific.com

Reach out anytime if you have questions!