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CHAPTER 6 Stock Research Checklist—Earni... > If a Particular Product’s Success At...

If a Particular Product’s Success Attracted You to a Company, What Percentage of That Company’s Sales Come from That Product?

This is one of the most important checklist items for investors to complete. Some companies’ newly introduced products may be very successful and generate good earnings. However, you should not blindly follow that success and buy those companies’ stocks based on those earnings. You need to find out what percentage of sales and earnings come from that product.

If the company is very big and the particular product amounts to less than 10 percent of the company’s business and you buy stock because of the particular product’s success, you will be making a mistake. You need to find out what the other parts of the business are doing and analyze the company as a whole.


  

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