Understanding Equities - Question 88

Should I invest in retail company stocks?

Your question is very general and, while there are many dynamic retail corporations, there are also retailers who have either been unable to find their markets or have lost them.

An excellent way to judge retail sales is to make a “samestore sales comparison.” To do this, you need to compare sales at-stores that have been open for at least one year. By looking only at stores that have been open for a year or more, you eliminate the effects of increased sales caused by recent new store openings.

When analyzing a manufacturing company, use comparative unit sales rather than dollar sales to get a better indicator of demand for the company's products.