Qualitative Approach: Steps for Selecting Strong Companies or Stocks

Qualitative Approach: Steps for Selecting Strong Companies or Stocks

t is essential to remember that ultimately it is people who run the companies and not numbers. Humans create and buy the services or products offered by any company.

Significance of Qualitative Stock Analysis: 

It is essential to remember that ultimately it is people who run the companies and not numbers. Humans create and buy the services or products offered by any company. Hence, it is not possible to look at the firm as just a collection of numbers.

Easy Stock Selection Steps 

1.     Management:

  • Management style: A company is led by CEOs, a Board of Directors, a Chairman, Management style, etc. For instance, a CEO who does not believe in automation or innovation then there could be a potential risk to the company i.e. a key man risk. 
  • Experience: Experienced candidates are most preferred in successfully running a company over an individual who is new to the industry. The competence of the management team can be measured depending on how they react during a crisis.
  • Governance / Ethics: Corporate governance measures if the top management is acting in the larger interests of the shareholders or not, especially the minority shareholders. Can be checked through disclosure, transparency, management principles, and consistency matter a lot. 

2. Employee Satisfaction: Any company that is truly interested in customer satisfaction should first focus on meeting the employee’s needs. It can be done by observing the employee turnover ratios. If the firm has a high turnover ratio then there could be a sign of an unhealthy or toxic work environment. Thus employees require the best amenities and a powerful independent HR.  

3. Supplier Satisfaction: It is highly important to treat suppliers fairly as well. A healthy relationship with suppliers goes a long way as it can provide its customers with a greater product experience. 

4. Customer Satisfaction: Most analysts would agree that market capitalization is greatly influenced by brand power, i.e. stock prices are directly affected by customer satisfaction. So, you should consider this factor for which best stock to buy. Every action of the firm can gear towards customer satisfaction. Nobody wants to deal with an organization that deals horribly with its customers. Therefore, focusing on the preference of customers with the qualitative approach can lead to a successful outcome for the firm. 

Qualitative Approach at Multibaggers. Co.in

However, this approach needs further filtrations. Therefore, if you are looking forward to avoiding all this hectic work then Multibaggers.co.in is the best place for you as you can hand over the job to our experts. At Multibaggers.co.in we provide the best stocks to buy for a long-term investment. In addition, we also filter the stocks that are selected on a qualitative basis. Like consumption, there are other approaches such as the investment approach, consumption approach, and many more. Under the Value Pick Stocks category we provide such stocks for long term investment.

KNOWLEDGE BASE