Every sound stock analysis answers the same five questions. Not out of tradition, but because each showed predictive value in the research:
Compare the price/earnings ratio to the company's own 5-year average, not to an absolute number. Cheap versus its own history historically predicted better returns.
Return on equity and profit margin, compared within the sector. Persistently high ROE is the footprint of a moat — what Buffett hunts for.
The Piotroski F-score (0-9) bundles nine accounting checks; high scores demonstrably outperformed (Piotroski 2000). Also check debt against equity.
Dividends are part of your return — as long as the payout is sustainable (below ~70% of profit).
Price above the 200-day average and positive 12-month momentum — the only technical signals that survived peer review (Faber 2007; Jegadeesh & Titman 1993).
For the most-searched stocks we have already filled in these five steps with today's numbers — see the guide index.