You want to own a company but what kind of company do you want to own?
The company is stable
Revenue and profit is stable and or growing from year to year.
The company has cash enough to weather a storm
A higher current ratio is a good indicator of this. It shows how much cash a company has compared to its current expenses.
It has little or no debt
Debt can cause a company big problems if not managed well. My preference is no debt.
It makes a good percentage of current profit
How do you even know what percentage of profit it makes to share price? Price to earnings gives you the inverse of profit percentage. For instance, a p/e of 5 is 20% profit per year. Price is the share price, so what this is telling you is what part of your investment is profit on a yearly basis. You pay $100, you get $20 per year.
It has good revenue and or profit growth
Generally, revenue growth will tell you how much your revenue and profit will grow on a yearly basis. Profit growth can be derived from revenue growth. Assuming that margins are about the same from year to year, profit growth will be about the same percentage.
It has to be a good company now
Some people buy companies hoping for profit in the future or hoping the company will come back. If you’re not trying to by 50 different companies (perhaps more like 10), you really don’t need to compromise on what you want in a company. There is at least one out there, that I know of, that should give you everything that you want.
What are your goals?
You might want to think about your own goals when you buy. Do you want a 9% return? 20%? Maybe 50%? You might be able to find any of these. And they might be less risky, rather than more risky, as you go up in return. You just need to know the companies you own.
You should put in a lot of work in research before you buy your next stock. If it takes 6 months to find something you want to invest in, so be it. Good luck!