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Ensi treffit yrityksen kanssa – mitä yhtiö oikeasti tekee? | Femme x Nordea Salkunhaltijat 07

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Kun olet päättänyt lähteä osakepoiminnan matkalle, kannattaa pysähtyä hetkeksi ennen kuin painat Osta-nappia. Tässä Femmen ja Nordean yhteistyöjaksossa Sanna Perälä Nordealta ja Sara Antonacci Inderesiltä avaavat sitä, miksi tutustuminen yhtiöön kannattaa ja, mitä asioita tällöin kannattaisi huomioida.

Why is it worth getting to know a company?

When buying a home, it makes sense to look closely at both the condition of the property and the finances of the housing company. The same principle applies to investing in shares. A company’s plans for the future may sound promising, but what it’s doing today and what its track record reveals can tell you just as much.

For investors, that means an appealing vision alone is not enough. First, you need to understand where the company’s money comes from. The good news is that researching companies can help you become a more informed investor while also giving you a better understanding of the world around you.

Where can you find information?

There is no shortage of information available about companies. They publish annual reports and quarterly results, while analysts produce research reports, blog posts and social media videos discussing their prospects. On top of that, AI assistants are becoming increasingly capable of explaining what companies do.

But always approach information with a healthy dose of scepticism! Companies naturally tend to present themselves in the best possible light. After all, who wouldn’t highlight only their most attractive qualities on a dating profile? AI assistants can also provide inaccurate information. That’s why it’s always a good idea to verify information from multiple sources.

What problem does the company solve?

A good place to start is to think about what problem the company wants to solve. Take a lift manufacturer, for example. There is an obvious need for lifts, as climbing to the top floors of a skyscraper is hardly practical. Banks, meanwhile, provide financing to meet the borrowing needs of individuals and businesses across society.

Essentials or nice-to-haves?

Some companies sell essential products and services. For example, food sales at large supermarkets tend to remain relatively stable because people need to eat regardless of the state of the economy. 

Other companies sell products that are much more discretionary, meaning customers can easily postpone their purchases. When times are tough, retailers selling household appliances and consumer electronics often see demand for expensive televisions decline.

Capital goods: when the economy is king

Many Finnish listed companies sell machinery and equipment to other businesses. These products are known as capital goods. Such companies tend to perform well when the economy is growing and businesses are investing in expansion by purchasing new equipment, upgrading facilities or increasing capacity. When economic conditions weaken, the same companies often reduce spending by postponing these investments.

Who does the company sell to: consumers or businesses?

It’s also worth considering whose problems the company is solving. Are its customers consumers or other businesses? This matters because the type of customer influences how much pricing power a company has, how easily customers can switch to a competitor and how stable demand is likely to be.

Consumer businesses: the power of a strong brand

Apple is one of the world’s largest consumer businesses, with a loyal customer base that is willing to pay a premium price for its products. This is reflected in Apple’s high profitability compared with many other consumer electronics companies.

By contrast, a Ryanair customer often chooses the airline based primarily on price and is willing to sacrifice comfort in exchange for a cheaper ticket. That creates a very different kind of relationship from the one customers have with Apple. Different customers, different business!

Business customers: cost-conscious but loyal

Microsoft, by contrast, sells many of its software products and cloud services to businesses and organisations. In these cases, the buyer is not an individual consumer but a company that depends on the service working reliably, securely and seamlessly with its other operations. 

Once these systems are in place, replacing them can be both costly and time-consuming. As a result, customer relationships can often be long-lasting.

What kind of market does the company operate in?

The market matters too. A company operating in a growing market with only a few competitors starts from a very different position than one in a sector where everyone is competing for the same customers on price.

Think about cafés. If you open the only café in a small town, customers are likely to find their way to you almost automatically. But if you open a café in the centre of Helsinki, where there are already several on every corner, you’ll have to compete for every customer. 

For investors, this means understanding the industry in which a company operates. In some sectors, building a successful business is relatively straightforward. In others, intense competition can quickly erode profit margins.

Why would this company outperform its competitors?

Think about why customers choose this particular company and whether it will be able to maintain its position in the future.

Competitive advantages: what makes a company stand out?

A strong brand, unique products and high switching costs can all create competitive advantages. What would it take for you to switch away from your iPhone? That kind of customer loyalty, or “stickiness”, is incredibly valuable to Apple.

Other companies compete through scale, allowing them to produce goods or services more efficiently and offer the lowest prices. In some sectors, however, it’s extremely difficult to build a lasting advantage over competitors. The airline industry is a good example. Competition is often intense, so it’s important to understand exactly where a company’s edge comes from.

Think about your favourite café. Do you keep going back because it is the cheapest option, because the staff know your order or simply because the coffee is the best? Competitive advantages work in much the same way. At their best, they create loyal customers who keep coming back, even when there are plenty of alternatives available.

A good business should show up in the numbers

A good business is reflected in strong business performance. The clearest signs of product quality, customer demand and pricing power are growing revenue and solid profitability.

What should you look for in the numbers?

At a minimum, pay attention to revenue growth, profitability and cash flow. It’s a positive sign if the company’s sales are increasing, its profitability is consistently strong and it has money left over to make investments or repay debts, for example. That said, what counts as good profitability varies significantly between sectors. Rather than focusing on a single percentage figure, it’s often more useful to compare a company with its own track record and with competitors in the same sector.

Numbers help distinguish an attractive story from a business that genuinely delivers. Ambitious visions and growth promises can sound compelling, but investors should ultimately check whether these are reflected in sales, profitability and cash flow. If a company claims to be in a strong position but the numbers don’t support that claim, you should approach with caution.

You should also look at the company’s valuation by comparing the share price with measures such as earnings per share and balance sheet value. Even a good company may not be an attractive investment if its share is priced too high.

Finally, try this simple test: could you explain to a friend in a couple of sentences how the company makes money? If the answer is no, it may be worth learning more about the business before investing in it.

Next up: how do you spot quality?

In the next lesson, we’ll explore how to identify a high-quality company. An interesting business is a good place to start, but does its quality show up in the numbers? And does the company still stand up to closer scrutiny after the first date?

Important information about investing

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