Questions to Ask Before Investing from What is Value Investing? By Lawrence A. Cunningham

1.      What products does the company sell or what services does it provide?

2.      How are they used?

3.      Do customers need these things?

4.      How stable is demand, and how well positioned is the company to meet it going forward?

5.      How distinctive is the company’s product compared to possible substitutes?

6.      Do consumers care, and how much?

7.      How likely is it that this company can raise prices without losing sales (called franchise value or economic goodwill)?

8.      Who is the company’s target customer/client base?

9.      Does the company depend on one or a few customers for most of its revenues, or does it have millions of customers?

10.  How much does any dependency matter – how financially solid is a major customer?

11.  How does the company sell its products?

12.  What is the company’s geographic market?

13.  How sensitive is it to economic downturns in that market?

14.  Can the company adapt quickly to changing economic and business conditions?

15.  How strong is the company’s supply chain?

16.  How strong is the company’s employee relations?

17.  Does the company operate in regions subject to ordinary or extraordinary political or economic risks?

18.  Is the company a classic, vintage, or rookie?

19.  What special business and financial risks do common stockholders face?

20.  What are the debt levels?

21.  What is the likelihood that debt investors would be paid before stockholders or that high debt would throw the company into bankruptcy?

22.  What is the company’s financial strength and industry leadership?

23.  Is its market expanding or contracting?

24.  Is there room for growth that will add value?