Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 184

Ten ways to generate new investment ideas

Generating ideas and gathering information is an ongoing process for our investment team. At Wilson Asset Management, we analyse data from a broad range of sources available to any investor with a keen market interest and a desire to learn. In fact, investors now have an unprecedented amount of information available to them to expand their knowledge base. We generate our investment ideas predominantly from the following 10 sources:

1) Media

The media provides a wealth of information on individual stocks, market themes and economic trends. Our investment team starts each day reading media reports that include local and international news.

Valuable media sources include newspapers (The Australian Financial Review and The Australian), radio (Ross Greenwood’s Money News on 2GB), television (Sky Business News and CNBC) and online platforms (Cuffelinks and Livewire). Market data provider Bloomberg, which is universally used by institutional and professional investors, has free daily email alerts and newsletters available on its website.

2) Market tables and price movements

After the market closes each day, we review share market tables to identify companies with share prices that have reached 12-month rolling highs and lows. In our experience, when a price hits a 12-month high, it can indicate a degree of momentum (particularly in a bull market) that will drive it higher. Conversely, if a company hits its 12-month low, this is often a sign of fundamental company issues and the price is likely to fall further.

If a company reaches its one-year high and we are not already invested, this can be a trigger for us to review the business. Similarly, a sharp share price increase also creates a compelling reason to investigate that stock further.

3) Word of mouth

While company executives can provide a biased perspective, personal and business contacts with knowledge of a company or industry can be more objective. Some of our most illuminating investing insights have come from personal and professional connections such as family, competitors, sell-side analysts and other fund managers.

4) Stock brokers

Stock analyst reports provide valuable and well-researched business insights. If a company is covered by sell-side research analysts, we spend considerable time analysing their reports along with understanding the consensus forecasts. Once we’ve determined what the market anticipates the company will earn, we build this into our modelling.

5) Directors buying

As a general rule, a company’s directors know more than others in the market. Therefore, directors buying shares is a very strong signal about the business. The announcement of a Change in Director’s Interest Notice revealing a company director has substantially increased their holding may prompt us to examine the company further.

6) Observations of a business

Everyday observations can also offer insights into a company. To my wife’s frustration, a visit to a shopping centre becomes a fact-finding mission including quizzing retail staff. Apple’s share price languished for many years until after the release of its portable media player iPod. Around this time, the casual observer would have witnessed thousands lining up to buy the iPod and an increase in foot traffic at Apple stores, however this strong demand was not reflected in Apple’s share price. Apple subsequently sold 55 million iPods, generating US$9 billion in revenue and spurring the share price.

7) Life experiences, behaviours and preferences

Our own life experiences, behaviours and preferences, and those of the people around us, can also reveal a consumer trend, or structural industry change, that leads us to an investment idea.

Last year, I tried to buy a tin of a2 Milk infant formula only to find there was a considerable shortage. This experience demonstrated demand for the product was vastly outstripping supply. This insight was the catalyst to investigate The a2 Milk Company (ASX:A2M) and subsequently invest in it.

8) Company meetings and site tours

Company meetings and visits offer insights into a business such as the quality of management and its culture – both are critical factors to our evaluation of a company (for more, see ‘Why bother with company visits?). Our meetings may also generate investment ideas. For example, an executive’s remark that a certain competitor is giving them a ‘run for their money’ could prompt us to investigate that competitor business as a potential investment.

Any investor can contact a company and ask to meet the CEO or other executives and, while access to executives at larger companies may be limited, micro and small-cap companies should welcome interest from potential shareholders.

Retail investors may also have the option of listening to earnings results teleconferences, giving them the opportunity to interpret the executives’ tone, as well as their words. Larger companies often host investor days for shareholders.

9) ASX announcements

We have found previously undiscovered investment gems through our regular scan of ASX company announcements. Company announcements can be a particularly good source of micro-cap investment ideas during reporting season.

10) Ask a lot of questions

Having a fascination with the market and an inquisitive attitude are indispensable attributes for investors. In my experience, the most successful investors ask a lot of questions and are driven to gain an in-depth understanding of a company, trend or investment theme.

It’s possible to generate a worthwhile investment idea, or a piece of information that leads to one, from a vast range of sources. Some brilliant investment ideas arise from a single, but valuable, insight while others are spawned from a combination of insights. Constantly gathering insights to develop a broader knowledge base and being alive to potential investment ideas is key.

Happy hunting!

 

Chris Stott is Chief Investment Officer of Wilson Asset Management. Disclaimer: Listed Investment Companies managed by Wilson Asset Management invest in A2M.

 

banner

Most viewed in recent weeks

Australian house prices close in on world record

Sydney is set to become the world’s most expensive city for housing over the next 12 months, a new report shows. Our other major cities aren’t far behind unless there are major changes to improve housing affordability.

The case for the $3 million super tax

The Government's proposed tax has copped a lot of flack though I think it's a reasonable approach to improve the long-term sustainability of superannuation and the retirement income system. Here’s why.

Tariffs are a smokescreen to Trump's real endgame

Behind market volatility and tariff threats lies a deeper strategy. Trump’s real goal isn’t trade reform but managing America's massive debts, preserving bond market confidence, and preparing for potential QE.

The super tax and the defined benefits scandal

Australia's superannuation inequities date back to poor decisions made by Parliament two decades ago. If super for the wealthy needs resetting, so too does the defined benefits schemes for our public servants.

Meg on SMSFs: Withdrawing assets ahead of the $3m super tax

The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.

Getting rich vs staying rich

Strategies to get rich versus stay rich are markedly different. Here is a look at the five main ways to get rich, including through work, business, investing and luck, as well as those that preserve wealth.

Latest Updates

SMSF strategies

Meg on SMSFs: Withdrawing assets ahead of the $3m super tax

The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.

Superannuation

The huge cost of super tax concessions

The current net annual cost of superannuation tax subsidies is around $40 billion, growing to more than $110 billion by 2060. These subsidies have always been bad policy, representing a waste of taxpayers' money.

Planning

How to avoid inheritance fights

Inspired by the papal conclave, this explores how families can avoid post-death drama through honest conversations, better planning, and trial runs - so there are no surprises when it really matters.

Superannuation

Super contribution splitting

Super contribution splitting allows couples to divide before-tax contributions to super between spouses, maximizing savings. It’s not for everyone, but in the right circumstances, it can be a smart strategy worth exploring.

Economy

Trump vs Powell: Who will blink first?

The US economy faces an unprecedented clash in leadership styles, but the President and Fed Chair could both take a lesson from the other. Not least because the fiscal and monetary authorities need to work together.

Gold

Credit cuts, rising risks, and the case for gold

Shares trade at steep valuations despite higher risks of a recession. Amid doubts that a 60/40 portfolio can still provide enough protection through times of market stress, gold's record shines bright.

Investment strategies

Buffett acolyte warns passive investors of mediocre future returns

While Chris Bloomstan doesn't have the track record of his hero, it's impressive nonetheless. And he's recently warned that today has uncanny resemblances to the 1990s tech bubble and US returns are likely to be disappointing.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.