Industry Analysis and Research Tools

1
Industry Analysis and Research Tools

• Mike Appleby
• Senior Analyst
• 30 Jan 07

2
Overview

• What is an Industry?
• Why does it matter?
• How to evaluate an industry
• Story Stocks
• Available Resources
• Stock Screener

3
What is an Industry?

• Industry is the specific category describing what
  a company does (oil exploration, biotech, drug
  delivery)
• More specific within a sector
• Consists of a company and
• its competitors

4
(No Transcript)
5
Why does it matter?

• A good company in a bad industry will not perform
  well
• Price of oil drops even best oil companies go
  down
• New home starts decrease all the homebuilders get
  hurt
• Buy the leading stock in a leading industry

6
Evaluating an industry

• The hardest part of stock research
• Read the companys annual report
• Look at economic indicators
• Interest Rates/Inflation
• CPI and PPI
• http//www.whitehouse.gov/fsbr/esbr.html
• http//www.federalreserve.gov/
• Look at competition

7
Competition

• Start with Yahoo!Finance
• Dont blindlytrust them
• Look in theannualreport!

8
Competition

• Look to find companies that not only have a
  similar business but have comparable market caps
  for the best comparison
• You want your company to outperform its peers and
  the industry it is a part of

9
Story Stocks

• Story stocks are relatively unknown companies
  with aninnovative new idea thatcould change how
  a businessis viewed or revolutionize
  anindustry. The fact that theyare unknown
  gives them significant room to grow.

10
Story Stocks

• Typical smaller companies and are hard to find
• Look for a company with significantly better
  numbers than the industry and competition
• Read the annual report and see if the company is
  doing something new or filling a void nobody else
  is in

11
(No Transcript)
12
Research Tools

• So how do you find all these things Ive told you
  to look for?
• Georgia Tech Library
• Value Line and Standard and Poors report
• Investext online
• IC resources
• Wall Street Journal
• Investors Business Daily
• Morningstar

13
Free resources

• The internet has a lot of good free sources of
  information
• Yahoo!Finance
• Key statistics
• SEC filings
• Comparisons with competition
• BigCharts.com for technical analysis
• MSN Money

14
Stock Screener

• Click on the link marked Stock Screener
• On the next page download the Deluxe Screener

15
Stock Screener

• You can save your searches
• There is a saved screener in the Private Docs
  section of the IC website based on the CANSLIM
  method
• This method might not return a lot of results
  though so modify it as you see fit

16
Review

• Make sure to study the Industry, its almost as
  important as the company
• Look for a stock with a story
• Use as many resources as possible

17
Questions?