Three Things to Consider Before Investing

Second, there are businesses with a business model that is only conducive in certain geographies. For example, Sonic(SONC) is a drive-up restaurant chain. The company advertises nationally, and management has grand designs to expand from coast to coast. However, if you take a look at Sonic's distribution, it is clearly a warm-weather business concept.

Lastly, there are international factors. Companies that operate in many countries are referred to as multinationals, such as Pfizer(PFE), McDonald's(MCD) and IBM, which all generate revenues in the U.S. and abroad. When a company earns money outside of the U.S., revenue and net income will be influenced by fluctuations in foreign currency. Thus, it pays to know where these companies operate, the currencies that are transacted in those countries and the relationship to the U.S. dollar in the foreign exchange markets.

-- Written by Scott Rothbort in Millburn, N.J.

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