At the end of the day, a company’s stock chart says it all. All stock prices represent relative values on any given day, but a stock chart tells the averaged out story of a company’s success, or lack thereof.
One of my favorite companies (I seem to have a lot of favorites lately!) is VCA Antech (NASDAQ/WOOF). We’ve talked about this company many times in this column.
The stock recently hit a new all-time high on the market and I really suggest you take the time to pull up the company’s 5-year stock chart. The stock split two-for-one in August of 2004 and ever since the company went public at the end of 2001, the stock’s been on a solid upward trend.
It is difficult to find companies like this in the stock market, but when you do, they can really create a substantial amount of wealth. It doesn’t happen overnight, but through diligent management with a well-defined and proven business plan.
When I’m looking for new investment opportunities and I see a stock chart like that of VCA Antech, I really take note and begin a thorough investigation of the company. Even though the stock has already gone up in value, a stock chart like VCA Antech denotes an established track record of success.
For me to consider a company for investment, it must have some track record of success, both operationally and on the stock market.
The future is never set, but in my experience, successful companies are more probable to remain successful over time. Of course they go through slow periods and all industries are at the whim of the general economy, but successful companies are always innovators in their industries. Once a company gets used to being an innovator, it is hard for it to change this corporate culture.
I’d never invest in a company based on its historical stock chart alone, but when I see one like VCA Antech, I find it really worthwhile to put the stock on my radar screen. It is always easier for a company with an established track record of success to make more money from its existing business than it is being a high- flying company at an early stage of development.