Investing Research Tools

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Investing Research Tools How to Use Them

• Joe York
• Georgia Tech Student Foundation
• Investments Committee
• Monday, October 10, 2005

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What do you need research tools for anyway?

• Stock Reports
• Stock Picking
• Company Analysis
• Fundamentals
• Technical Analysis
• Industry Analysis
• Competitive Analysis
• Stock Re-evals
• Sector Reviews
• Industry/Economic Reports to the Committee

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What do we have access to?

• The IC provides many resources which are not free
  to the public
• Wall Street Journal
• Investors Business Daily
• MorningStar
• GATECH has other resources available
• See library Value Line
• Many free research tools available online
• MSN Money
• Yahoo! Finance
• BigCharts.com

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Stock Picking Things to keep in mind

• Our time-line is infinite.
• Focus on extensive analysis of the current
  economic trends.
• Work on refining our outlook for future economic
  trends
• Invest in issues we hope to hold for a long
  period of time.

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Stock Picking MSN Screener
At bottom of this next page click Deluxe Stock
Screener to install the MSN YOU MUST USE
INTERNET EXPLORER after all this is MSN!
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Stock Picking MSN Screener
You can save your searches or import saved ones
under the FILE menu. In the GTSFIC Private Docs
section of the website is a great CANSLIM based
stock screener .IFF file You can (and should)
try to make your own, since the above one will
not always return a high of stocks!
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Stock Picking IBD 100

• Another great source for stock ideas is the
  Investors.com IBD 100 list.

You can download these at www.investors.com
look on the left toolbar for IBD 100 Use our GTSF
login NOTE Some of the stocks towards the top
of this list will already be discovered watch
this list frequently to see which ones are moving
up!
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Stock Picking ValueLine Investment Survey

• Another great tool is available at the GT
  library.
• Contains several lists including
• Most Timely Industries
• Timely stocks
• Timely stocks in timely industries
• Highest yielding stocks
• Biggest "Free-Flow" Cash Generators
• Stocks with widest discounts from Book Value
• Stocks with highest percentage earned on capital
• There is both a general and Small/Mid Cap edition

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Stock Picking - OK Im looking at some stocks
Now What!!??!

• Three basic things make a stock worth a second
  look
• Fundamentals
• Value
• Industry
• Fundamentals Usually, unless you have some
  evidence otherwise, a company with bad
  fundamentals will continue to have bad
  fundamentals (all things equal)
• Value It could be a great stock, but a Joe
  stock
• Industry Could be a great, cheap stock, but if
  its in the wrong industry, it WILL NOT perform
  well

Exhibit A Joe Stock
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Company Analysis - Fundamentals

• Yahoo! Finance (http//finance.yahoo.com) is my
  personal favorite for fundamentals.
• Also MSN Money, SmartMoney.com, Investors.com,
  MorningStar.com

Yahoo! Finance Toolbar
MorningStar EPS Growth Chart
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Company Analysis Fundamentals

• What are you looking for?
• Profit and Operating Margins need to be as high
  as possible
• ROA and ROE (ROI) need to be as high as possible
• Quarterly and yearly earnings growth needs to be
  positive (especially for a small company)
• Low debt and Debt/Equity ratio
• Institutional Ownership needs to be less than
  70-80, especially if it is a growth stock
• Dividend (if applicable) is always a plus
• These are just a few GENERAL rules, use your head
  and ALWAYS compare any numbers to the INDUSTRY!!!

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Company Analysis Fundamentals

• Look at the balance sheet (found on
  finance.yahoo.com also)
• Look at increases in spending on capital goods,
  equipment, long term investments, property plant
  and equipment, intangible assets, etc.
• Avoid companies with too many red items in any of
  their financial statements.
• Compare financial reports, recent news, and price
  movements to information on a stocks Annual
  Report.
• You can find the Annual Report on a companys
  given website. This is usually under Investor
  Relations.

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Company Analysis - Valuation

• Also use the Key Ratios from Yahoo! AND technical
  analysis (coming up soon) to VALUE a company.
• Make sure the P/E, P/B, P/S ratios are lower or
  equal to the industry average for the company.
• Look at a stock chart to see if the company has
  already had a run-up
• PAY ATTENTION TO VOLUME AND PRICE MOVEMENT

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Company Analysis Technicals

• BIGCHARTS.COM

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Company Analysis Technicals

• ALWAYS include a 50 and 200 day Simple Moving
  Average (SMA)
• Under moving averages, select SMA then enter
  50,200 in the box next to it
• Look at both Long and Short term charts, but
  DONT use technical analysis on anything over 1
  year!
• Things to include Volume, Relative Strength
  Index (RSI), Money Flow, PE over time, Rolling
  EPS, MACD (advanced), momentum use Investopedia
  when in doubt!

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Company Analysis Technical

• Compare your company to an index and its
  industry.
• Analyze Index and Industry choices with your
  Mentor in order to find the right fit.
• If you cant find the right fit, bring in up to
  three possible charts and IDG will find the one
  that fits the stock price chart best.

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Industry Analysis

• Perhaps one of the most difficult things the
  research!
• Use WSJ, Investors.com, GOOGLE, Yahoo! News, GIT
  Library INVESTEXT PLUS Database.
• Always read through the companys
  annual/quarterly report to get an idea for what
  EXACTLY they do!
• Look for articles, analyst opinions, research
  reports.

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Competitor Research

• Finding an appropriate competitor for a company
  can be difficult NEVER rely on Yahoo!s
  competitor list without first checking them out.
• Use multiple sites to find competitors. Also use
  annual report and web searches to find other
  companies which are in similar markets

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Miscellaneous Economic and Finance Data

• http//www.fmcenter.org - Financial Markets
  Center
• http//globinvestor.com Lots of Stuff
• http//www.wto.org/ - Global Trade Issues
• http//www.nber.com/ - Economic researchers
  publications
• http//www.bls.gov - Bureau of Labor Statistics
• http//www.bea.gov/bea/dn1.htm - Latest GDP
  figures
• http//www.bea.gov/bea/regional/data.htm -
  Regional/State Economic Data
• http//www.bea.gov/bea/di1.htm - International
  economic and trade data

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10 Things to remember when doing a stock report

• DO NOT FALL IN LOVE WITH ANY STOCK!
• KNOW EVERYTHING ABOUT THE COMPANY AND ITS
  COMPETITORS
• FUNDAMENTALS ARE THE KEY TO LONG TERM INVESTING
  TECHNICAL ANALYSIS IS JUST A TOOL.
• AVOID COMPANIES WITH TOO MUCH DEBT.
• LOOK FOR COMPANIES WHOSE PRODUCTS ARE HOT TODAY
  AND WILL BE HOT TOMORROW!
• KNOW THE INDUSTRY OUTLOOK LIKE THE BACK OF YOUR
  HAND.
• KNOW WHOS MANAGING THE COMPANY AND WHERE THEYRE
  TAKING THE COMPANY!
• NEVER STOP RESEARCHING THE ECONOMY.
• READ ABOUT THE MARKET DAILY.
• DO NOT FALL IN LOVE WITH ANY STOCK!

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Questions?