{
  "id": 17633938,
  "title": "Due diligence",
  "url": "https://urgent.news/2026/11/01/due-diligence",
  "topic": "business",
  "section": "Business",
  "published": "2026-11-01T16:00:00.000Z",
  "source": {
    "name": "Philippine Star Business",
    "slug": "philippine-star-business",
    "url": "https://www.philstar.com/business/2026/11/02/2567163/due-diligence"
  },
  "original_language": "en",
  "account": "Investors often rely on \"hot tips\" from friends, insiders, or promoters of schemes that seem too good to be true, especially with the rise of social media and online investment advice from unlikely celebrity endorsers. Fear of missing out, or FOMO, can also influence investment decisions. Due diligence is a crucial aspect of good corporate governance, particularly for companies listed on the Philippine Stock Exchange (PSE). It involves taking reasonable steps to ensure transactions adhere to internal corporate policies and regulatory requirements. This includes vetting the qualifications of key executives, reviewing transactions with related parties, and evaluating the sources and uses of borrowed funds.\n\nIn our daily lives, we already practice due diligence without realizing it. For example, when purchasing medicine from a pharmacy, we check the proper dosage and expiry date. When trying on a leather jacket, we consider the fit, price, and frequency of use. These actions help us make informed decisions. Wealth management units in banking systems offer portfolio advisers who provide information and advice based on an investor's established risk appetite. When evaluating investments, due diligence is essential, even for well-advertised options. Overwhelming amounts of information can lead to \"analysis paralysis,\" making it difficult for ordinary investors to assess all the available data on an investment and its prospects. In such cases, seeking guidance from an asset management group with an active research unit may be beneficial.\n\nChoosing the right company for investment requires a thorough assessment, which includes reviewing the qualifications of key executives, evaluating transactions with related parties, and examining the sources and uses of borrowed funds. A good track record and a substantial Assets Under Management (AUM) size are positive indicators. For individual stock picks, due diligence remains necessary. This can involve analyzing market share, profitability, price/earnings ratio, and a strategy for customer retention and growth. Industry definitions, such as market share, may no longer be as static as they once were, particularly for traditional companies like media, power generation, or property development.\n\nMany companies now have investor relations (IR) units that provide statistics on earnings, major challenges, market share, and other financial data. These units often fall under the finance or communications function. Stock brokerage research departments attend quarterly IR briefings to stay informed about the companies they advise. Participating in these sessions can provide valuable insights into how management addresses current issues. News articles, CEO interviews (now often online), and company reports to stockbrokers offer additional information on a company's value. However, the absence of quarterly briefings, delayed financial statement releases, or the non-disclosure of audit findings can raise red flags.\n\nToo much information can sometimes lead to confusion rather than clarity, resulting in \"analysis paralysis.\" When faced with overwhelming data, investors must discern which facts are relevant to their investment decisions. Despite the presence of unknown or unexpected factors, such as new players, changing industry landscapes, and unforeseen technology breakthroughs, an informed investor should still strive to understand the risk involved and the potential rewards. Ultimately, due diligence is a mandatory part of the investment process, ensuring that investors make well-informed decisions and are prepared for the consequences of their choices.",
  "summary": "Are there still investors who make financial decisions based on “hot tips” from friends, insiders or proponents of schemes that are “too good to pass up?”",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}