How to discover stock trading ideas

Thousands of companies list their shares on North American stock exchanges. The question is, how can you narrow the playing field and identify the ones best suited to your objectives?

In this article, we'll review a few places where you can start hunting for broad investment themes, then take a look at a few of the key tools and resources to help you identify, monitor and evaluate specific stocks.

Where to look for broad investment themes

Economics and politics: Economic and political trends can have a powerful influence on a company's performance. Every country's economy moves through different cycles, from expansion and growth to contraction and recession. Some companies do better at different stages of that cycle. At the same time, major opportunities or challenges for companies can result from government decisions around taxation, interest rates, privatization, minimum wage laws, and so on.

Demographic and social themes and trends: From the rise of China as a major global economy to the wave of retiring and aging baby boomers in Western countries, big picture themes are creating new markets and new demand for goods and services. In energy, healthcare, technology, and other areas, there are major shifts that could drive growth for companies that provide solutions.

Company announcement and industry trends: Financial results, mergers and product launches — these kind of company announcements can drive share prices in the short term and sometimes over the longer term as well. Bad news can push prices down as investors shed their shares, but good news can boost a company's stock price. As a stock investor, you'll want to keep tabs on the financial media and watch for developments in the industries and sectors that interest you. You may even want to directly monitor specific companies in order to get news as soon as it's released.

Analyst picks: Financial analysts continuously update their lists of stars and dogs — stocks they think are a good buy and others they recommend selling. Their reports provide specific insights and opinions into what companies are doing right, what they're doing wrong, and how that may or may not translate into gains and losses. Analysts aren't always right, but over time you may find some that trust more than others.

Tools and resources to identify specific companies

Qtrade Investor helps you sort through stocks (as well as exchange-traded funds, mutual funds and other securities) to find the ones that are suited to your goals and objectives.

Here are some of the most useful tools and resources:

  • Screeners allow you to filter stocks using prebuilt screens, such as undervalued stocks or high dividend yield stocks, or screen them using customized criteria such as sector or market capitalization.
  • Model portfolios allow you to study the stock picks of professional portfolio managers. You can replicate the holdings in your own portfolio, or simply use the models to get investment ideas.
  • Analysts' recommendations provide well-researched, expert reviews of Canadian and U.S. investments, including top picks for growth, value and income stocks.
  • The Morning News Call gives you the day's top headlines and insights, so you can scan the latest company, market, business and economic news. (Under Quotes & Market Info, select Market Commentary.)
  • News feeds keep you up-to-date with company earnings and developments, along with market and industry news from around the world.
  • The New Issues centre give you access to IPOs (initial public offerings), so you can be one of the first to invest in new securities when they start trading. Sign up to receive email notifications when new issues become available.

Monitoring stocks

Tools that allow you to monitor companies you're considering include:

  • Real time quotes that allow you to follow companies and market indices.
  • Watchlists that allow you to create a portfolio of stocks you would like to monitor.
  • You can also set alerts to be notified when market events or stock price changes occur.

Due diligence

When it comes time to do your due diligence, Qtrade Investor provides extensive fundamental research data. For any company, you can delve into key performance metrics from its most recent financial statements, along with data on its performance history, ratings, and more — everything you need to evaluate the company and compare it to its peer group.

Questions?

For questions or help with Qtrade Investor's tools and resources, please speak to one of our investment representatives.