Industry Analysis and Reasearch Tools

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Industry Analysis and Reasearch Tools Powered By Docstoc
					       Brian Meier
February 15, 2011
   Industry Analysis

   Research Tools

   Examples
    ◦ Presentation
    ◦ Report
   Industry Analysis

   Research Tools

   Examples
    ◦ Presentation
    ◦ Report
   Specific branch of manufacturing, service,
    or trade
   Consists mainly of company competitors
   Collection of producers of perfect
    substitutes
   Future revenues
   Market size
   Threat of competitors
   Relative cheapness stock
   Short-term stock price pressure
   Product differentiation
   Existence of monopolies
   Patents held by other companies
   Technological/procedural advancements
   Barriers to entry
   Foreign trade policy
   Perfect substitution
   Imperfect
    substitution
   Size and scope of
    business

Competitors put
fundamental analysis
in perspective
   4 P‟s
    ◦ Product
      Quality
      Brand name
    ◦ Place
      Market location
      Distribution methods
    ◦ Promotion
      Advertising
      Sales force
    ◦ Price
      Product demand
      Costs
   World Economics              Global Economy
   U.S. Economics
    ◦ Economic and
      Monetary Indicators
        Unemployment Rate       U.S. Economy
        Industrial Production
        Durable Orders
        Corporate Profits
        Retail Sales                Sector
        Housing Activity
    ◦ No one indicator is
      most important
    ◦ Composite of 11               Industry
      leading indicators

                                   Company
   Takes advantage of industry trends
   Positioned to capture/create market share
   Demonstrated effective management
    decisions
   New products in pipeline
   News releases
   Economic Data:
    ◦ Economic Statistic Briefing Room:
    www.whitehouse.gov/fsbr/esbr.html

   Industry Data:
    ◦ www.morningstar.com

   Competitors:
    ◦   www.investors.com
    ◦   www.finance.yahoo.com
    ◦   www.morningstar.com
    ◦   www.wsj.com
   Industry Analysis

   Research Tools

   Examples
    ◦ Presentation
    ◦ Report
   Stock Reports
      Stock Picking
      Company Analysis
        Fundamentals
        Technical Analysis
      Industry Analysis
      Competitive Analysis
   Stock Re-evaluations
   Sector Reviews
   Industry/Economic Reports
   The IC provides many resources which are
    not free to the public:
      Wall Street Journal
      Investor‟s Business Daily
      MorningStar
   GATECH has other resources available:
      See library – Value Line
   Many free research tools available online
      MSN Money
      Yahoo! Finance
      BigCharts.com
   Our timeline 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
At bottom of this next page
click “Deluxe Stock
Screener” to install the MSN
… YOU MUST USE INTERNET
EXPLORER – after all this is
MSN!
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!
   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!
   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
   Three basic things make a stock worth a
    second look:
      Fundamentals                         Exhibit A:
      Value                                Joe Stock
      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
   Yahoo! Finance (http://finance.yahoo.com)
    is my personal favorite for fundamentals.
   Also MSN Money, SmartMoney.com,
    Investors.com, MorningStar.com




           Yahoo!      MorningStar
           Finance     EPS Growth
           Toolbar     Chart
   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!!!
   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 stock‟s
    Annual Report.
   You can find the Annual Report on a company‟s
    given website. This is usually under Investor
    Relations.
   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
   BIGCHARTS.COM
   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
    DON‟T 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!
   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 can‟t find the right fit, bring in up to
    three possible charts and IDG will find the
    one that fits the stock price chart best.
   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 researcher‟s
    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
1.    Do not fall in love with any stock
2.    Know everything about the company and its
      competitors
3.    Fundamentals are the key to long-term investing;
      technical analysis is just a tool
4.    Avoid companies with too much debt
5.    Look for companies with products hot today and
      tomorrow
6.    Know the industry outlook like the back of your hand
7.    Know who‟s managing the company and where they‟re
      taking the company
8.    Never stop researching the economy
9.    Read about the market daily
10.   Do not fall in love with any stock
   Industry Analysis

   Research Tools

   Examples
    ◦ Presentation
    ◦ Report
1.   Business Description   8.    Fundamental
2.   Financial Summary            Analysis
3.   Recent News            9.    Financial Statements
4.   Products/Services      10.   Competitive Analysis
5.   Company Divisions      11.   DCF Valuations
6.   Industry Analysis      12.   Technical Analysis
7.   Macroeconomic          13.   Scenarios
     Factors                14.   Final
                                  Recommendation
Thank You!

Questions?

				
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posted:6/17/2011
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