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Chapter 6. Stocks > Watching for Trends
6.5. Watching for Trends
One way to get an early warning about problems is by comparing recent financial results to the same period a year ago. If you see numbers getting significantly worse, find out why. Consult the management discussion in a company's annual report; press releases; news reports on the company, its competitors, and the industry itself; or answers from investor relations representatives.
Tip:
For quarterly results, you need to compare the same quarter from the current year and the previous year, for example, the fourth quarters for fiscal years 2008 and 2009. Many companies do better during specific times of the year. For example, bookstores and retailers do particularly well in the last calendar quarter because of holiday buying. Home improvement stores often do better during the summer months.
