Where to get stock ideas

Finding new opportunities is one of the big challenges of investing. We’re regularly bombarded by huge amounts of news, research, and financial information. And with over 2,000 companies listed on the ASX alone, how do you figure out what companies are best placed to meet your investment goals?

Be guided by your investment strategy

There’s not much point in researching a company if it doesn’t match your objectives. So the first step in filtering stock ideas is to reflect on your investing goals and strategy. Once you know whether you’re looking for income or growth, how much risk you’re willing to take, and what your timeframes are, you can start to refine your research. For example, if you’re looking for exposure to short-term performance, you could focus your research on growth companies. Or if you’re looking for investments that provide income, you could focus on established businesses with a healthy dividend policy.

If your goal is to build wealth gradually, rather than buying and selling frequently, you might be a passive investor rather than an active one. In this case, a form of passive investing such as Exchange Traded Funds (ETFs) could be worth exploring.

When you use your strategy as a guide, you might miss out on high-performing companies that don’t match your research criteria. But if you’re focused in your research criteria, the investments that you choose may be more likely to provide you with your desired return. Find out more about how to research a stock before you buy.

Use a stock screener

A stock screener can be incredibly helpful for an investor looking to discover investing opportunities. It allows you to select your investment preferences or goals, and then search for a list of the companies that meet your criteria.

With CommSec, you can access a comprehensive Stock Screener on our website:

You can nominate custom filters, or run a predefined search to find companies that meet certain investing objectives (e.g. growth or income). You can filter the results by recommendations or dividends, as well as a wide range of financial ratios and indicators.

For example, if you want to invest in technology stocks and you’re looking for large companies that pay regular dividends, you could use the stock screener to search for companies that:

• Belong to the information technology sector
• Have a large market cap
• Pay dividends above a certain rate (enter your preferred dividend yield).

The stock screener results would give you a list of companies that match your criteria, and you can then research these companies further to work out whether they match your goals.

Find out more about what tools you can use to research and compare stocks.

Look at recommendations

Independent research providers like Goldman Sachs and Morningstar regularly publish recommendations to buy, hold, or sell particular stocks. CommSec customers can view the latest recommendations by logging in and going to Quotes & Research > Trading Ideas.

You can filter the recommendations by market cap, sector, or type of recommendation. For example, if you want to invest in the health sector, you could search for healthcare companies that were recently upgraded to a “Buy” recommendation, and use that as a starting point for your research. Every recommendation has a report attached to it – you can read these for context on why the research provider has made their recommendation.

What are other investors buying or selling?

Investing is about running your own race, and you should choose investments because they align with your goals – not just because everyone else is buying or selling a particular stock. However, it’s often interesting to look at what other investors are trading, and this can be a good way to gauge the current market sentiment.

Every week, CommSec publishes a list of the top 20 traded Australian shares and the top 20 traded international shares. These lists can be a useful place to start your research, or to get a current snapshot of what’s happening in the market.

News and subscriptions

CommSec provides a broad range of market reports and research to keep investors up to date and help you identify your next investing opportunity.

• The Markets has the latest market news and reports from our expert in-house team, including videos, stock prices and trends.
• In our Executive Series videos, our market analysts interview representatives from leading Australian companies to bring you the latest on potential investment opportunities.
• Research Wrap is a weekly email covering stocks and sectors to watch, economic forecasts and key dividend dates. To opt in to Research Wrap, log in to your CommSec account, go to Support, and look for the Subscriptions section.

You can also keep an eye on the general financial press, like newspapers, blogs, and newsletters. This will help you stay on top of your investments and learn about other views from industry experts.

Give it some time

If you’re already doing these things but you’re still not sure what to invest in, don’t worry. There’s a lot of information out there, and it takes time to get to know the share market. Keep reading, researching, and watching the market. The more you learn, the better equipped you’ll be to spot the right investment opportunity for you when it comes along.