Others trade stocks by looking at candlestick charts; I look at financial statements first: Does this company really have what it takes?

The stock market is never short on stories: artificial intelligence today, new energy tomorrow, and another hot trend the day after. The concepts change every day, but your wallet doesn’t necessarily grow along with them.
When deciding whether a company is worth paying attention to, I look at its financial statements first. Is revenue growing? Are net profits improving consistently? Is operating cash flow keeping pace? These figures are far more reliable than promotional posters.
Some companies’ share prices soar like rockets while their profits crawl along like snails. That kind of disconnect is worth watching out for.
Of course, impressive financial statements aren’t a universal pass. You also need to consider whether the valuation is reasonable, how fierce competition is in the industry, and whether future growth can be sustained.
After all, buying stocks isn’t like buying awards. Even an excellent company can leave investors holding the bag if its shares are already outrageously expensive.
My investment philosophy is simple: I’m not afraid of a company being temporarily unpopular; I’m afraid it has hype but no profits.
When you look at financial statements, what do you focus on most: revenue, net profit, or cash flow? Let’s talk in the comments! $MU

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