Free checklist
Due-diligence checklist for any stock
Diligence is not about becoming an analyst; it is about refusing to skip the boring parts. These twelve checks take under an hour with the right tools, and every one maps to a page on SteadyShares.
- 1
Explain the business in one sentence
Who pays, for what, and why they will keep paying. If the sentence needs three commas, keep reading before you buy.
- 2
Five years of revenue, not one
Direction beats level. A single great year is a story; five rising years is a pattern. Check the statements tab, annual view.
- 3
Margins: level and direction
Gross margin says pricing power; operating margin says discipline. Falling margins with rising revenue means growth is being bought, not earned.
- 4
Real profit and real cash
Net income can be styled; operating cash flow is harder to fake. If profits never become cash, the profits are a rumour.
- 5
The balance sheet can survive a bad year
Debt against equity, and interest cover. Great businesses with too much debt become bad stocks at the worst moment.
- 6
Returns on capital above 10%
ROE (and better, ROIC) above roughly 10% sustained over years is the signature of a business worth owning. Beware ROE inflated by debt or buybacks: check equity is not shrinking to nothing.
- 7
A moat you can name
Brand, switching costs, network effects, scale, or cost advantage. Name which one, or accept you own a commodity that competes on price alone.
- 8
Valuation against its own history and its peers
P/E, forward P/E and PEG against the sector and the company's own five-year range. Cheap against a broken past is a trap; expensive against everything needs a reason.
- 9
A margin of safety against a sober fair value
Estimate fair value with conservative growth, then demand a discount. The discount is your protection against your own optimism.
- 10
Who else is buying
13F filings show what serious funds hold; congressional disclosures show what politicians bought. Neither proves anything, but conviction from people with research budgets is worth a look.
- 11
Dilution and insider selling
A rising share count quietly taxes your ownership every year. Heavy, sustained insider selling is not automatically bad, but it is a question that deserves an answer.
- 12
Write the bear case before you buy
One paragraph: the most plausible way this loses money. If you cannot write it, you have not looked hard enough. If it scares you, size the position smaller.
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Educational information, not financial advice. Figures current as of July 2026 where dated; allowances and rates change, so check the source before acting.