Here are some things to consider before you buy:

Performance - Get your hands on performance statistics for the company. Take a look at rates of return (e.g. total revenues, average equity, average assets), and growth rates. Questions that you should ask include:

• Is there earnings growth?
• Are earnings comparable to similarly sized companies?
• Is there sufficient return on capital?

Financial Strength - Check out the financial position of your company:

• How does their current ratio and debt/equity % compare to the rest of their industry's?
• What is their cash position?
• Do they have any assets, like real estate, appreciated above book value?

Products and Markets - What is the nature their business? What are their future prospects?

• Does the company have a unique product?
• Does a market niche exist for them?
• What is their competitive advantage?

Ownership - Who owns the joint?

• How many shareholders are there? How many shares are outstanding?
• Is the company buying back its own shares?
• Do employees own an interest in the company either directly or through an employee stock ownership plan (ESOP)?
• Are more shares being generated through stock splits and stock dividends? This creates a more active market and possibly qualifies your company for a stock exchange listing.

Both financial performance and strength should be reflected in the stock price. Are they? Look at key ratios, like price/earnings and price/book value %—how do these compare to industry standards? Is the price of your stock appropriate, or not?

Do all you can. Get research materials like Walker's Manuals to help you out. Call the company. Find a broker dealer who can help. Maximize your chances of making a great buy—look hard before you leap.