First, look for successful companies that are long-standing industry leaders. These businesses typically have thrived during many market cycles and have proven to be preeminent performers. Second, check the consistency of the company's present and past earnings. A 10-year history of rising earnings is usually a good indication of stability. Third, buy only those companies with wise management capable of industry leadership.
Strong management is the basis of corporate success.
Read annual reports from several years. Look for evidence of solid business planning. Fourth a company must be financially sound. Once again, preview the annual report. Check for a strong balance sheet and reasonable long-term debt.