Doing Your Homework: Finding the up to date Information for every Stock on Your List

Doing Your Homework: Finding the up to date Information for every Stock on Your List

 

Knowing the list of key information critical to stock selection isn’t enough for success. You have to actually find that information for every stock on your list. And, because the information is constantly changing, you also have to keep your analysis up to date - preferably quarterly.

 

How much time your research effort will take depends on how you do it.

 

Library:  Visiting the library and writing or calling for annual reports will certainly work, but you’ll spend a lot of time gathering data. If you’re able to automatically download the information you want directly into a spreadsheet or database, that part of your research can happen in minutes every day - while you’re sleeping.

 

Internet:  It’s hard to imagine anything that has done more to ease the burden of securities research for the individual investor than the development of the Internet. The amount and quality of information you can easily access from the comfort of your own home truly boggles the mind.

• Need an annual report? Click.
• Access to government fillings? Click.
• Prices, charts, analysis, commentary? Just click again.

Information that once took vast amounts of time and dedication to assemble now rushes to your fingertips down the information superhighway.

 

Technology can certainly help you cast a wider net in your search for winning stocks, but your ultimate success as an investor will most likely be determined by how you use the information you find, rather than how you find it.

 

There are three fundamental ways in which the information you’re looking for will vary:

 

1. Cost

• A surprising amount of information is available for free, either directly from companies themselves, from government agencies like the Securities and Exchange Commission (SEC), or certain Web sites.
• Brokerage firms often make some form of research available to their customers.
• Subscription services vary dramatically in price, from the cost of a daily newspaper to thousands of dollars per month for comprehensive data and analysis services.

 

 

2. Format
Information is available in print or electronic format.

• Newspapers, magazines, and annual reports are familiar in print.
• Electronic versions of all these items are commonly available, as are a host of software applications and Web sites.

 

3. Content

• Financial statements, balance sheets, and company reports provide a rich source of data items, but you will probably still have to compute the ratios yourself.
• Many third party information services provide exactly this kind of processed information already calculated for you.
• Key financial ratios, earnings trends, and per share data are commonly listed, along with analysis and commentary, including rating services and lists of specific security recommendations.
• The amount of information is usually commensurate with its cost.

 

The cost, format and content of all kinds of information sources are rapidly evolving, and any attempt at a comprehensive listing would be almost instantly obsolete. By pointing out a few alternatives across the spectrum of choices, we hope to show you a sample of the kind of information that’s available. How you choose to proceed will depend on your level of interest, resources, preferences, and expertise with computers.

 

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Printed Materials:

• Newspapers (business sections)
• A company’s annual report
• Stock rating publications: Value Line Investment Survey, Standard & Poor’s Stock Reports, Morningstar Stock Analyst Reports

 

Internet Sources

• Most recent annual and quarterly reports
• Recent news releases and access to a news release archive
• A calendar of events, including planned shareholder meetings.
• Notes and commentary from recent analysts meetings, speeches, or other presentations.

 

Software and Data Services

• These are software programs and data providers that deliver an almost unimaginable amount of detailed financial data on virtually every publicly traded stock.
• They include powerful analysis tools and forecasting models, charting capabilities, and interfaces with spreadsheets and other software programs.
• They are also expensive.

 

Once you find the right source of information for you, it’s time to use your data to define the universe of stocks you will be tracking.