How to Unearth Companies to Invest In

Many of you would have wondered how to get to know new companies that might be ten baggers in the future or how to discover the next Google or Apple. Personally, over the years, I have found a few avenues where I get to know about new stocks or increase my knowledge about the existence of companies.

One of the ways is to read books and magazines. By reading books, I got to know many American companies such as Coca-Cola, Procter & Gamble, J&J, etc. From local magazines such as The Edge and the now-defunct Pulses, I came to know about local stocks. I got to know Super Group when I was reading an article in the Pulses magazine. Super Group is the manufacturer of Super Coffee and a few other ready-to-drink beverages.

You can also get to know about stocks from free talks and workshops conducted by various training organisations. You can just attend the free talks and workshops to get to know about new companies. You can choose not to attend their paid workshops that they will be promoting if you don’t like it. I got to know Asia Pacific Breweries (APB) through one of these free workshops. APB is the maker of the famous Tiger Beer and other alcoholic drinks.

Friends, family members and relatives can lead you into new companies too. During a normal conversation, your friend might say that he drinks a particular brand of chicken essence every morning and he feels energetic throughout the day. It turns out that the brand he likes is Brand’s Chicken Essence. The manufacturer of this is Cerebos Pacific.

I discovered many companies from forums such as Valuebuddies forum. I got to know companies like Kingsmen, Vicom, Hour Glass, ARA, Adampak and many more from these forums.

You can also get to know new companies through your own research through SGX website, Shareinvestor or through your broker’s tools. In Shareinvestor, I would sort the companies according to different sectors and look into the best companies in these sectors by filtering these companies according to ROE, net margins, etc. You can do these filtering from your broker’s website. My broker, DBS Vickers, has such a function.

One of my favourite ways to discover companies is by daily observations. I discovered OKP when I was in my uncle’s car and we were driving along Central Expressway (CTE). CTE was undergoing road widening and I saw concrete blocks lining the roads with the acronym “OKP” stamped on all of them. Furthermore, I discover companies when I buy particular products and look at the manufacturer. I then find out if these companies are listed.

Other avenues will be reading the finance section of newspapers, reading financial news online and watching TV shows like Money Mind, Suze Orman show, etc.

I have saved the best way for the last. The best way to get to know companies is to look into yourself. What are your interests and hobbies? Which industry do you work in? Which industry did you work in previously? What are the industries you understand? What are the things you use daily? Do you take the train to work everyday? If you do, you can look into SMRT. If you are interested in aircraft and work in the aircraft industry, SIA Engineering Company is a good local company to look into. If you are working in the healthcare sector, you can research into Raffles Medical. By looking at stocks listed in the industry you work in, you will have an upper-hand as you have an “insider look” that analysts or other investors don’t have access to.

A point to note is that not all the companies you get to from avenues such as forums, magazines and books are fundamentally strong. You need to exercise independent thinking and research further into these companies yourself before ploughing your money into these companies. Happy hunting!

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2 thoughts on “How to Unearth Companies to Invest In

  1. I feel that it is important to have an open mind and to be more observant whenever you are. Even if it may not be a listed company or business, it can still be a great business model that you can learn and apply to other business next time. No matter what it is, I find it really fun and exciting while hunting for company with great business model, especially when you found them :)

    • Hi shanrui,

      Yes that’s true as well. Some companies that are not listed are run so well that sometimes I think, “If only this company was listed”. It’s fun to look out for companies and research into them. It’s like doing investigative work.

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