Episode 28: Building Wealth Podcast with Steven Sitkowski (How to Analyze a Stock)
- MMG Team
- 2 days ago
- 4 min read
How to Analyze a Stock Before You Invest
How do you know whether a stock is actually worth buying?
Stock prices can move quickly, but understanding the company behind the stock can help investors make more informed decisions. In Episode 28 of the Building Wealth Podcast, Steven Sitkowski explains how he evaluates company fundamentals while also breaking down the latest stock market trends, interest rates, earnings, and investor sentiment.
What Is Fundamental Analysis?
Fundamental analysis looks at the financial health and performance of a company rather than focusing only on its stock price.
Steven Sitkowski walks through several metrics investors can examine when researching a company, including:
Revenue and earnings growth
Profit margins
P/E ratios
PEG ratios
Earnings per share
Cash flow
Debt
Return on equity
Insider ownership and activity
Market capitalization
One metric Steven particularly emphasizes is the PEG ratio, which considers both a company's P/E ratio and its earnings growth rate. Instead of looking at valuation alone, this can provide additional context about how that valuation compares with the company's growth.
Free Tools for Stock Fundamental Analysis
You don't necessarily need expensive software to begin researching stocks.
Steven demonstrates how Yahoo Finance can provide investors with key company information, including market capitalization, P/E ratio, earnings per share, dividend yield, trading volume, beta, and other financial data.
He also discusses Koyfin, which provides more detailed financial information that can help investors examine trends in revenue, profitability, earnings, cash, debt, and valuation.
Using companies such as Apple, Nvidia, and Micron as examples, Steven demonstrates how these numbers can help build a clearer picture of a company's financial performance.
Strong Earnings Continue to Support the Stock Market
Episode 28 also examines the broader stock market.
Despite weakness in technology stocks and continued uncertainty surrounding oil prices and interest rates, Steven remains encouraged by corporate earnings.
According to the figures discussed in the episode, 87% of S&P 500 companies reporting had beaten earnings estimates, while earnings momentum was at its strongest level since 2011. Steven identifies this earnings strength as one of the biggest reasons for continued confidence in the market.
Small business indicators also remain encouraging, with optimism, profitability, and hiring expectations showing strength.
Are Technology and AI Stocks Still Strong?
Technology remains one of the strongest-performing sectors of the year, driven largely by artificial intelligence and data-center investment.
Steven discusses Nvidia in particular, explaining why short-term declines don't necessarily change his longer-term view of the company or AI. He also highlights the importance of looking beyond a company's stock price and examining its revenue growth, profitability, cash position, debt, and valuation.
What Should Investors Watch Next?
Interest rates remain one of the market's biggest uncertainties.
Higher oil prices can contribute to inflation, potentially influencing future Federal Reserve decisions. Steven also points to several economic reports worth watching, including GDP, personal income, consumer spending, jobless claims, and especially core PCE inflation, an important inflation measure watched by the Federal Reserve.
From a technical perspective, Steven notes that the S&P 500 remained above its rising 50-day moving average at the time of recording, keeping the broader trend bullish despite recent volatility.
Key Takeaways from Episode 28
Fundamental analysis can help investors evaluate the financial health of a company.
Earnings growth, profitability, debt, cash flow, and valuation are important metrics to research.
The PEG ratio can add growth context that the P/E ratio alone does not provide.
Yahoo Finance and Koyfin can provide useful fundamental stock data.
Strong corporate earnings continue to support the broader stock market.
AI and technology remain important market themes despite recent volatility.
Oil prices, inflation, and interest rates remain important risks to watch.
The S&P 500's 50-day moving average can help investors evaluate the broader market trend.
Episode 28 of the Building Wealth Podcast with Steven Sitkowski provides a practical introduction to fundamental stock analysis while explaining the economic and market forces investors should continue watching.
Whether you're researching your next investment or simply trying to better understand what makes a company financially strong, knowing how to analyze the fundamentals can help you make more informed investment decisions.
Frequently Asked Questions
What is fundamental analysis in stocks?
Fundamental analysis is the process of evaluating a company's financial performance and overall health. Investors can examine factors such as revenue, earnings, profit margins, cash flow, debt, valuation, and growth to better understand a company.
What financial metrics should investors look at before buying a stock?
Steven Sitkowski discusses metrics including earnings growth, revenue growth, profit margins, P/E ratios, PEG ratios, earnings per share, cash flow, debt, return on equity, and insider activity when evaluating a company's fundamentals.
What is the difference between a P/E ratio and a PEG ratio?
The P/E ratio compares a company's stock price with its earnings, while the PEG ratio incorporates earnings growth into the valuation. Steven explains that he focuses more heavily on PEG because it provides additional context about how a company's valuation relates to its growth.
What are some free tools for fundamental stock analysis?
In Episode 28, Steven demonstrates Yahoo Finance as a source of fundamental stock information and also discusses Koyfin for more detailed financial analysis. These tools can help investors research metrics such as earnings, revenue, valuation, cash, debt, and profitability.
Why are corporate earnings important for the stock market?
Corporate earnings provide insight into how businesses are actually performing. Steven highlights strong earnings growth as one of the main factors supporting the stock market despite concerns surrounding oil prices, inflation, and interest rates.
What is the Building Wealth Podcast with Steven Sitkowski about?
The Building Wealth Podcast with Steven Sitkowski helps investors better understand the stock market, investing, wealth building, options trading, and economic trends. Drawing on decades of experience in the financial industry, Steven Sitkowski shares practical market insights, investment education, and strategies designed to help individuals make more informed financial decisions.
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