A Contemporary Approach to Selecting Common Stocks:
Step One: Find those companies that meet the Value-Line rank criteria of 1 or 2 on timeliness and safety. Or analyze a company given to you by your Professor.
Step Two: Determine if the products offered by the firm are franchise products, i.e. no close substitutes, not heavily regulated, needed and desired. Consider the existing substitutes, the substitutes that are down and upline, new entrants and barriers to entry, and new technologies.