Have you ever heard people talking about a company that could be the next Microsoft and thought to yourself, "Maybe I should buy this stock?" If you have, pat yourself on the back for thinking like a smart investor. But just because people talk about a stock doesn't mean everyone can buy it. If it's a small new company, it may not trade on the major exchanges, or it may not be publicly offered at all. Here's how to investigate a stock to find out if you can buy it.
Start by obtaining some approximation of the company's name and if possible, what industry category it might be found in. If you don't know the complete legal name, don't let that stop you – you may still be able to find it.
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Type the company's name – or what you THINK its name might be – into the "Quote" window at Yahoo's Finance site. As you type, the site will bring up a list of publicly-traded companies that might be a match. If you see one that might be your target company, select it from the list and you'll be taken to the company's page in the Yahoo Finance Directory.
Review the company profile. This should be sufficient to help you determine if you've got the right company. If not, go back to the list and try another possibility.
If you still come up empty-handed, double-check the company's name by any means available. You can always "google" it, but it may be more productive to go back to the source and ask questions. Perhaps the company is a subsidiary of another company and does not trade on its own. This could make it very difficult to find unless you know the name of the parent company; however, doing a search on the company name and its industry may uncover such a connection.
If you've established that you have the correct name, but Yahoo Finance doesn't seem to be aware of the company's existence, there are three possibilities: a) the stock is not traded on any of the major exchanges, b) the stock is not traded in the U.S., or c) the company is privately held and no stock is available for purchase.
Rule out a) by going to the Pink Sheets web site and searching on the company name. The "Pink Sheets" list over-the-counter stocks that are not traded on the NASDAQ system. They are still publicly-traded stocks and you should still be able to buy your stock if you find it here.
Rule out b) by going to the international Corporate Information web site and searching the company name there. This very comprehensive site has information on over 31,000 global companies. If you find your company there, you may be able to buy it if your brokerage firm offers access to overseas markets, or you may be able to buy it in the form of an ADR (American Depositary Receipt). See Resources for more information on how to invest in overseas stocks.
If you've eliminated a) and b) as possibilities, most likely your stock is not publicly traded at present. While it may be possible to purchase shares directly from the company (if you can find it!) you should probably move on and consider other investments.
If you find your stock, make a note of the stock symbol, then look over the current price, trading volume, historical performance and any research reports that may be available. You’ll want to study this information carefully before investing in the stock. If you aren't experienced in evaluating stocks, consult your broker for his/her opinion before making a purchase.
Things You'll Need
Internet access (all URLs are listed under Resources)
A brokerage account