Who runs the company?
Generally, companies that do well are companies that are run well. For a company to be run well, it needs to have a good management team. If the company has a good management team, you could feel quite confident that your investment is in good hands.
Here are two things to check to understand how good the management team is:
- Check their performance – One way is to look at the financial performance of the company over the last 3 to 5 years (see next section on financial performance). A good management team will have a good record of financial performance.
- Reputation – You could Google the CEO and CFO of the company to find out what people say about them. Try to look for a management team with a good reputation and stay away from those with too many negative comments.