stock-analysis
Stock Analysis
Produce an evidence-backed fundamental analysis of one company, benchmarked against the right peers, and delivered as a written report plus a sector-relative scorecard.
The principle that governs everything here
A financial metric carries no meaning until you know the sector it came from and the company's own history.
If X earns a 20% operating margin and Y earns 30%, that tells you nothing about which is the better business. Y may be in software (where 30% is mediocre) and X in distribution (where 20% is exceptional). Y's 30% may need three times the capital to produce, so X earns a far higher return on the money invested. Y's margin may be eroding while X's compounds.
Two consequences shape this whole skill:
- Never rank companies on a single metric. Every judgement combines profitability, returns on capital, cash conversion, balance sheet, growth durability, governance, and price.
- Compare like with like. Benchmark against sector peers or against the company's own multi-year record — never a raw cross-industry number. For banks, insurers, REITs and miners the standard ratios are not merely less useful, they are undefined or inverted; those sectors need their own metric set entirely.
Read references/05-returns-and-dupont.md for why return on capital, not margin, is the metric that actually determines compounding.