More than Just Lines on a Map: Best Practices for U.S Bike Routes
Managing Your Investments
1. MANAGING YOUR
INVESTMENTS:
MAKING VALUE LINE AND
MORNINGSTAR WORK FOR YOU
Milwaukee Public Library, Business & Technology
414.286.3051 2012
2. Investor Resources at
Milwaukee Public Library
Print
Value Line: Investment Survey (Expanded, Small
and Midcap), Special Situations. All print available
at the Central Library Business Desk and
Investment Survey available at select
neighborhood branches.
Morningstar: Mutual Funds and FundInvestor
And More!
3. Investor Resources at
Milwaukee Public Library
Access Online
Value Line Standard Edition- Investment
Survey
Morningstar Investment Research Center
http://www.mpl.org/file/business_index_select.ht
m
Available within City of Milwaukee libraries or
remotely to City of Milwaukee cardholders.
4. Getting Started With Basic Terminology
Stocks- an ownership share(s) in a corporation.
Buying shares of stock makes you part owner of
the corporation that issued stock. Over the long
term, the value of that ownership stake will rise
and fall according to the success of the underlying
business.
Mutual Funds- an investment company that
continually offers new shares and stands ready to
redeem existing shares form the owners. When
you invest in a fund, your money is pooled with
other investors and then managed by a group of
professionals who try to earn a return by selecting
stocks for the pool. Can be less volatile.
5. Getting Started With Basic Terminology
Public Company- company which has issued
securities through an offering, and which now
are traded on the open market. Also called:
publicly held or publicly traded.
Ticker Symbol - abbreviation, usually two or
four letters, used to identify a stock for trading
purposes.
Dividend- a payment by a company to a
shareholder. It is usually paid quarterly in
cash.
6. Getting Started With Basic Terminology
Stock Exchanges
NYSE- New York Stock Exchange- oldest and
largest stock exchange in the U.S., located on
Wall Street in New York City. Approximately 2,800
companies listed.
NASDAQ- world’s biggest stock exchange. In
1990s became the market of choice for high-tech
businesses. Approximately 3,200 companies
listed.
7. Getting Started With Basic Terminology
Dow Jones Industrial Average (DJIA): the
most widely used indicator of the overall
condition of the stock market. A price-weighted
average of 30 leading U.S. stocks.
S&P 500 (Standard and Poor’s 500): a basket
of 500 stocks that are considered to be widely
held. Most experts consider the S&P 500 one
of the best benchmarks available to judge
overall U.S. market performance.
8. Getting Started With Basic Terminology
Beta- a quantitative measure of the volatility of
a given stock, mutual fund or portfolio, relative
to the overall market. Median beta is 1.0,
anything over 1.0 is _% more volatile.
Market Capitalization: the market value of all
common shares outstanding for a company,
calculated by multiplying the recent price of a
stock by the number of common shares
outstanding.
9. Getting Started With Basic Terminology
Price/Earning Ratio (P/E Ratio): the most
common measure of how expensive a stock is.
The higher the P/E ratio, the more the market
is willing to pay for each $ of annual earnings.
Whenever a stock’s relative P/E is more than 1,
its own P/E is greater than that of the market.
When its relative P/E is less than one, it’s own
P/E is less than that of the market.
10. Investment Survey
Value Line is an investment research company
collecting and analyzing data on over 1,700
most actively traded U.S. listed stocks.
Online subscription is for Standard Edition
Standard Edition is large cap companies only
Small and Mid-Cap Survey available in paper format
only.
11. Investment Survey
Value Line Investment Survey is divided into 3
parts and a supplement.
Part 1 is the Summary and Index
Part 2 is the Selection and Opinion
Part 3 is the Ratings and Report
12. Investment Survey
Milwaukee Public
Library subscription
provides access to
current and past issues
of Investment Survey
only.
17. Investment Research
Center
Offers in-depth analysis of stocks, mutual funds,
and ETFs (exchange-traded funds).
includes reports, analyst research, key ratios,
financial statements, dividend and return
information and company snapshots.
Articles and videos on investing and personal
finance.
19. Investment Research
Center
Screen for funds allows you to search
by a variety of data points including
general characteristics (fund name or
category), ratings and performance
criteria (Morningstar rating, annual
returns), and management and
purchasing data (fees and expenses).
24. Questions? Contact Us!
Milwaukee Public Library
Business and Technology Desk
Central Library, 814 W. Wisconsin Ave.
414-286-3051
Editor's Notes
Good evening and welcome to Managing Your Investments: Making Value Line and Morningstar Work for You. My name is Kristina and I am a librarian in the Business and Technology department at MPL’s central library. This evening’s program is going to focus on the investment resources Value Line and Morningstar. Some of you may be familiar with one or both of these names, they are both highly regarded in the investment community. While both resources provide ratings and commentary on stocks and mutual funds, we will focus on Value Line’s excellent stock resources and Morningstar’s strength in the mutual fund world. By the end of this program you’ll know how to remotely access these online resources with a valid Milwaukee Public Library card, understand how to search for stocks and mutual funds, and understand key ratings and ratios that will assist in making smart investing decisions.
Milwaukee Public Library has some wonderful, world class resources for investors in print and electronically. Both Value Line and Morningstar are currently available in PRINT format at the Business and Technology desk at the Central Library. Though we will no longer have Morningstar in print after September 2012. We also have a variety of books in our general collection that provide investment advice and are particularly useful for beginner investors.
Online access to Value Line and Morningstar is available within any of the City of Milwaukee libraries (through one of our internet computers) or remotely, from home, to City of Milwaukee cardholders (n.b. not suburban libraries). To find these resources you can follow the link provided on the slide OR from our website by searching for “Value Line” or “Morningstar” in the search box. GO TO LINKSHOW HOW TO SEARCH BY NAMEBefore diving into the databases let’s go over some basic investment terminology that will come in handy when navigating through Value Line and Morningstar.
To be listed on the NYSE a company must have in excess of 2,200 shareholders with an average daily trading volume of at least 100,00 shares. Generally, the company must have a total capitalization of $750 million or pretax earnings in excess of $10 million. ( Idiot’s Guide to Investing, 2009)
Value Line is an investment research company collecting data and analyzing performance of over 1,700 stocks, along with select mutual funds and options. Value Line is best known for their Investment Survey, one of the most widely used independent investment services in the world. Companies included in the Value Line universe are continually evaluated for their 6-12 month performance.Online subscription is for the standard edition of the Investment Survey, this includes large cap companies. Cap or capitalization refers to the value of the firm’s outstanding shares. Market Cap (Capitalization)Also called market value, is the total value of all a firm’s outstanding shares. Three categories:Large Cap stocks – market capitalization over $5 billion. Medium Cap stocks - market capitalization between $1 billion to $5 billion. Small Cap stocks - market capitalization of less than $1 billion.
Part 1 Summary and Index: provides a key to locating the latest quarterly and supplementary reports and cites the most recent data on each of the stocks followed. Part 2 Selection and Opinion: contains Value Line’s latest economic and stock market forecasts, one-page write-ups about interesting and attractive stocks, model portfolios , and financial and stock market statistics. Part 3 Ratings and Report: is the main section of the Investment Survey, it presents full-page, individual stock reports which contain, among other things, Value Line’s Timeliness, Safety, and Technical ranks, financial and stock price forecasts for the coming 3-5 years, analyst’s written commentary and more.Let’s access Value Line from the library’s website and take a closer look. EXIT POWERPOINT PULL UP VALUE LINE IN INTERNET WINDOW
Market cap is calculated by multiplying the price of a stock by the number of common shares outstanding. For example, if XYZ company has 15,000,000 shares outstanding and a share price of $20 per share then the market cap is (15,000,000 x $20)= $300,000,000.
The three parts of the survey are labeled along with the supplement. Past issues are listed chronologically below the most current issue. Issues are updated Monday mornings. You’ll notice other surveys listed along with the Investment Survey, however these are not available electronically. They are available in print at the central library. As was mentioned, the Rating and Reports section is the meat of the survey. This is where you’ll find the rating and analyst information that will help you decide whether to invest in a particular stock, or run away screaming. Let’s take a look at the Ratings and Report section. CLICK ON RATING AND REPORT FOR MOST CURRENT ISSUE.BROWSE THRU THEN GO BACK TO MAIN PAGE TO SEARCH BY TICKERSince not every stock is reviewed in every Ratings and Reports weekly issued, you can also search for a particular stock using a company’s name OR ticker symbol. DEMONSTRATE THIS USING “Merck &Co.” MRK
Lets take a closer look at one of the Value Line reports and what key ratings indicate. Your presentation print outs include key Value Line definitions that will help explain each of the fields of a Value Line report and I’ll go over them individually.
I also want to point out the left sidebar which has useful resources such as Lookup Industry – where you’ll find industry reports. Ranks Changes- has a listing of stocks whose Timeliness or Performance ranks have changed for the week. Top 100 – has Value Line’s top rated stocks. In addition to the #1 rated stocks, the drop-down menu allows sorting by various criteria. Stock Screening – lets you search for stocks by industry, performance, location and level of social responsibility. Lets take a closer look at this feature.
This was an overview, get to know Value Line even more by using their Investment Education tab. With complete guides, glossary, and sample reports, you have all the tools you need to make the Investment Survey work for you.
Now let’s take a look at Morningstar and how their Investment Research Center can assist in making investment decisions. As I stated previously, Morningstar does contain stock information, although we are going to focus on mutual funds. As a reminder, when you invest in a fund, your money is pooled with other investors and then managed by a group of professionals who try to earn a return by selecting stocks for the pool. Morningstar includes reports, analyst research, key ratios, financial statements, and company snapshots. The Investment Research Center has a lot of information. Let’s explore the site and take a closer look at some of the features.
See handout “Investment Research Center Overview” for detailed information on each component.
In screener replicate the following search:1.)Morningstar analyst rating (read the details on what ratings mean on handout) =Gold, click ok2.)Risk <= below average, click ok3.)Select “Play” to see all ___ funds
Let’s search for a fund and examine the Morningstar report. Vangaurd Dividend Growth (VDIGX). When searching by fund name you are automatically brought to the “Quote” page of the report. Here you can immediately see the Morningstar rating= 4 stars and analyst rating = Gold.The star rating is a quatinitative assessment of a fund’s past performance (return and risk). Analyst rating indicates the analyst’s convistion in the fund’s ability to outperform it’s peer group over the long term. If a fund receives a Gold, Silver, or Bronze, is means Morningstar analysts thing highly of the fund and expect it to outperforms over full market cycle of at least 5 years. Funds are evaluated on five key pillars – Process, Performance, People, Parent, and Price. VDIGX’s rating of Gold menas it is a fund that distinguishes itself across the five pillars and has garnered the analysts highest conviction.We are also immediately shown the NAV, or net asset value per share of the fund. The NAV is a valuation of an investment company’s shares calculated by subtracting any liabilities from market values of firms assets and dividing the difference by number of shares outstanding. This Illustrates the amount a shareholder would receive for each shared owned if the fund sold all it’s assets at current market value.
See handout “Fund Analyst Report Components”Most of these fields are represented on the QUOTE page in various boxes (chart, performance (maps the performance of the fund as compared to S&P 500), risk and rating).
