This article is from an ongoing series: The 6 Keys to Building a Winning Portfolio of Stocks – Part 4 of 6

“Company Mission and Values”

By Dr. Thomas K Carr

The following article is adapted from Dr. Carr’s forthcoming new book, “Stop Trading, Start Investing: the 6 Keys to Building a Winning Long-Term Portfolio”

In my previous three articles in this series( Pt 1, Pt 2 and Pt 3 ) we looked at how “organic growth” that can be sustained over time, “fair value” as measured by the price to sales ratio, and relative price weakness are essential to finding great long-term investments in the stock market. In this article we are moving on to key number four.

The previous three screens all required the use of screening software. In my full-length book on this topic, I let you know what software I use and how you can program in the same screens I use to find winning stocks. If you want to know when this book is ready for purchase, you can sign up here for an instant alert (don’t worry, I never sell email addresses).

In presenting the fourth key to finding the best stocks for investment we will need to leave the screening behind. With the three previous keys in place, we have an awesome screen that will give us a handful of great companies to consider for long-term investment. But we can’t just buy every stock that passes through. Each run of the screen will produce a list of 15 to 20 stocks, maybe more, depending on market conditions. That is too many. We need to do further research in order to whittle this number down.

As we move beyond screening, we leave the mechanical part of the process behind and move into the more discretionary part. From here on, you will need to apply some common sense, as guided by the following parameters.

The next key to finding great long-term, investment-grade companies is to go to the website of the company and do some digging around. Below you will find two lists of questions you will want to answer before any stock makes it to your “buy now” list. These are questions related to the “mission” of the company. The Company Mission defines what it is about, what it is trying to accomplish as an organization, its vision for what it hopes to accomplish as an organization, its values as a corporate culture, and so on.

You should be able to find answers to each of the questions I have listed below on the company’s website. Unfortunately, there is no universal template for how company websites are set up, but nearly every company will have “About Us” and “Investor Relations” pages. Start with these. If you find either of these pages confusing or non-informative, that is a red flag. You might also find pertinent information on “company mission statement”, “ethics,” “compliance” or “legal” pages, all of which or normally reached via the Investors Relation page.

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