This document outlines a 12-step process called the "NASDAQ Dozen" for analyzing stocks. It evaluates 12 key metrics for a stock, including revenue, earnings per share, return on equity, analyst recommendations, earnings surprises, earnings forecasts, earnings growth, PEG ratio, industry earnings, days to cover, insider trading, and weighted alpha. For each metric, the document provides guidance on how to assign a "passing" or "failing" grade based on predetermined criteria. It then works through an example analysis of Walmart (WMT) stock, assigning a score to each metric. The overall analysis provides a framework for conducting a thorough fundamental evaluation of a stock in a systematic manner.
This document provides an overview of several methods for analyzing the profitability of a business, including profitability ratios, break-even analysis, and return on assets and investment. It defines key terms like gross profit, operating profit, net profit, fixed vs variable expenses. It then demonstrates how to calculate important profitability ratios like gross profit margin, operating profit margin, and net profit margin using financial data from a sample company. Finally, it shows how to conduct a break-even analysis using sales and cost information to determine the sales volume needed to break even. The document aims to introduce small business owners to these fundamental profitability analysis tools.
This document provides advice for beginner investors on avoiding common mistakes when starting to invest in the stock market. It recommends:
1) Doing in-depth research to understand a company's finances, competitors, and position before investing. This includes comparing metrics like earnings and market capitalization between competitors.
2) Using demo accounts to practice investing with fake money before using real funds.
3) Controlling emotions by having an investment plan with targets for gains, maximum losses, and sticking to the plan.
(Article) william j. o'neil sell rules to build your stock investing perfor...Ariel Devulsky
The document provides guidelines for when to sell stocks to cut losses, take profits, and avoid broader market downturns. Some key points:
- Sell any stock that drops 7-8% below your purchase price to cut losses. Consider this a form of insurance against potential devastating losses.
- Consider selling if a stock shows weakness based on factors like declining earnings growth, relative price strength, industry performance, profitability, or accumulation/distribution.
- The best time to sell for a profit is when the stock still looks strong to most investors, such as after a split or break from a base with strong volume.
- Learn to read the overall market and sell some positions if signs point to
Why Average Investors Earn Below Average Market Returns?Peter Lim
Investor behavior causes average investors to earn below-average market returns. Studies show investors tend to buy high and sell low by pouring money into mutual funds when the market rises and pulling it out when it falls. This causes their returns to be substantially less than the actual market returns of around 12% annually. Investors overreact to good and bad news due to emotional decision-making. However, taking a disciplined, long-term approach by ignoring emotions and not reacting to short-term market changes can help investors achieve higher returns over the long run.
Taking on Wall Street: A Comparative Study of Strategies Sourced from "The Pr...Quantopian
A unique set of data comprised of strategy returns sourced through traditional means from managers (“the pros”) and from strategies developed on Quantopian’s platform (“the crowd”) is analyzed. We detect distinct groups of strategy styles within the data: In particular, some "crowd" strategies fall into their own clusters distinct from those within the "pro" data set. A few do overlap as well. We go on to analyze the various strategy groups with respect to environmental conditions and risk factors (among other relevant features), teasing out differences in trading styles.
Ultimately we judge how well “the crowd” is doing so far, in terms of being able to compete with the established managers not only in terms of performance but also with respect to risk management and overall novelty and diversification in the trading styles that have emerged. Finally we address general notions (and pitfalls) of building meta strategies from manager return streams.
This presentation was part of QuantCon 2015 hosted by Quantopian. Visit us at: www.quantopian.com.
Fagnum is a new way to celebrate content marketing. Fagnum is a thriving content publishing and marketing platform to help the budding startups, bloggers, filmmakers, websites and content writers to help them grow and flourish.
http://www.fagnum.com
Behavioral finance acknowledges that investors are not perfectly rational and takes into account psychological factors that influence behavior. Some common behavioral quirks exhibited by investors include overconfidence, loss aversion, anchoring, regret, and herding behavior. While laboratory experiments show evidence of these quirks, questions remain about whether they apply outside the lab and how they aggregate in financial markets. Herding behavior, where investors follow the actions of others, can potentially explain bubbles when many investors exhibit the same behavioral biases.
"A Framework-Based Approach to Building Quantitative Trading Systems" by Dr. ...Quantopian
Contrary to popular wisdom the difference between a retail quant trader and a professional portfolio manager is not in "having better trade entry and exit rules". Rather it is the difference in how each approaches the concepts of portfolio optimisation and risk management.
Both of these topics are synonymous with heavy math, which can be off-putting for beginner retail systematic traders. Hence, it can be extremely daunting for those without institutional experience to know how to turn a set of trading rules into a robust portfolio and risk management system.
In this talk, Mike will discuss how to take a typical retail quant strategy and place it in a professional quantitative trading framework, with proper position sizing and risk assessment, without resorting to pages of formulas or the need to have a PhD in statistics!
This document provides an overview of several methods for analyzing the profitability of a business, including profitability ratios, break-even analysis, and return on assets and investment. It defines key terms like gross profit, operating profit, net profit, fixed vs variable expenses. It then demonstrates how to calculate important profitability ratios like gross profit margin, operating profit margin, and net profit margin using financial data from a sample company. Finally, it shows how to conduct a break-even analysis using sales and cost information to determine the sales volume needed to break even. The document aims to introduce small business owners to these fundamental profitability analysis tools.
This document provides advice for beginner investors on avoiding common mistakes when starting to invest in the stock market. It recommends:
1) Doing in-depth research to understand a company's finances, competitors, and position before investing. This includes comparing metrics like earnings and market capitalization between competitors.
2) Using demo accounts to practice investing with fake money before using real funds.
3) Controlling emotions by having an investment plan with targets for gains, maximum losses, and sticking to the plan.
(Article) william j. o'neil sell rules to build your stock investing perfor...Ariel Devulsky
The document provides guidelines for when to sell stocks to cut losses, take profits, and avoid broader market downturns. Some key points:
- Sell any stock that drops 7-8% below your purchase price to cut losses. Consider this a form of insurance against potential devastating losses.
- Consider selling if a stock shows weakness based on factors like declining earnings growth, relative price strength, industry performance, profitability, or accumulation/distribution.
- The best time to sell for a profit is when the stock still looks strong to most investors, such as after a split or break from a base with strong volume.
- Learn to read the overall market and sell some positions if signs point to
Why Average Investors Earn Below Average Market Returns?Peter Lim
Investor behavior causes average investors to earn below-average market returns. Studies show investors tend to buy high and sell low by pouring money into mutual funds when the market rises and pulling it out when it falls. This causes their returns to be substantially less than the actual market returns of around 12% annually. Investors overreact to good and bad news due to emotional decision-making. However, taking a disciplined, long-term approach by ignoring emotions and not reacting to short-term market changes can help investors achieve higher returns over the long run.
Taking on Wall Street: A Comparative Study of Strategies Sourced from "The Pr...Quantopian
A unique set of data comprised of strategy returns sourced through traditional means from managers (“the pros”) and from strategies developed on Quantopian’s platform (“the crowd”) is analyzed. We detect distinct groups of strategy styles within the data: In particular, some "crowd" strategies fall into their own clusters distinct from those within the "pro" data set. A few do overlap as well. We go on to analyze the various strategy groups with respect to environmental conditions and risk factors (among other relevant features), teasing out differences in trading styles.
Ultimately we judge how well “the crowd” is doing so far, in terms of being able to compete with the established managers not only in terms of performance but also with respect to risk management and overall novelty and diversification in the trading styles that have emerged. Finally we address general notions (and pitfalls) of building meta strategies from manager return streams.
This presentation was part of QuantCon 2015 hosted by Quantopian. Visit us at: www.quantopian.com.
Fagnum is a new way to celebrate content marketing. Fagnum is a thriving content publishing and marketing platform to help the budding startups, bloggers, filmmakers, websites and content writers to help them grow and flourish.
http://www.fagnum.com
Behavioral finance acknowledges that investors are not perfectly rational and takes into account psychological factors that influence behavior. Some common behavioral quirks exhibited by investors include overconfidence, loss aversion, anchoring, regret, and herding behavior. While laboratory experiments show evidence of these quirks, questions remain about whether they apply outside the lab and how they aggregate in financial markets. Herding behavior, where investors follow the actions of others, can potentially explain bubbles when many investors exhibit the same behavioral biases.
"A Framework-Based Approach to Building Quantitative Trading Systems" by Dr. ...Quantopian
Contrary to popular wisdom the difference between a retail quant trader and a professional portfolio manager is not in "having better trade entry and exit rules". Rather it is the difference in how each approaches the concepts of portfolio optimisation and risk management.
Both of these topics are synonymous with heavy math, which can be off-putting for beginner retail systematic traders. Hence, it can be extremely daunting for those without institutional experience to know how to turn a set of trading rules into a robust portfolio and risk management system.
In this talk, Mike will discuss how to take a typical retail quant strategy and place it in a professional quantitative trading framework, with proper position sizing and risk assessment, without resorting to pages of formulas or the need to have a PhD in statistics!
The document discusses concepts from behavioral finance that influence investor behavior and markets, including herd behavior, anchoring, and various calendar effects. It provides an overview of each concept and recent evidence questioning whether strategies like "Sell in May" have been reliable. The conclusion acknowledges that while machines now influence markets, human behavior still plays a role, and deep research is needed to overcome cognitive biases and take a long-term view of investing.
The document discusses the limitations of using "Up Market Capture" and "Down Market Capture" ratios to predict the future performance of investment managers. It finds:
1) There is little persistence or consistency in a manager's UMC/DMC ratios over time, indicating they are not predictive of future performance.
2) The predictive power of UMC/DMC ratios for subsequent periods is mixed - sometimes they correlate with performance and sometimes they do not.
3) Categorizing markets as simply "up" or "down" oversimplifies the many factors that drive market performance, limiting the usefulness of UMC/DMC ratios.
The document concludes UMC/DMC ratios are essentially
This document discusses the benefits of a multi-manager investing approach over relying on a single manager. It argues that combining complementary managers with differing styles can provide market-beating returns while reducing risk, analogous to how a team with different player types is more likely to succeed than relying on a single star player. The document also stresses the importance of ongoing monitoring to ensure the right managers are being utilized depending on changing market conditions.
This document provides summaries of Warren Buffett's advice on investing based on excerpts from Berkshire Hathaway annual letters and other sources. It advises investing in low-cost index funds rather than trying to pick stocks or time the market. Buffett believes investors should ignore forecasts, have discipline by sticking to their investment plan, and not overreact to short-term market movements. The document suggests developing a written investment plan and controlling emotions to invest successfully like Buffett advocates.
I'm looking for 2 people that want to change their current situation.
See how $18, one time, can change your situation in one year. There is strength in numbers. Teamwork makes the dream work. Take a look here >>> http://tinyurl.com/kb7luuf
http://Kaea80.4c4all.com
http://flow77.4c4all.com
http://unitedlove1.4c4all.com
This document summarizes key concepts in behavioral finance, which models how psychological factors influence investor behavior. It discusses two categories of irrationalities: errors in information processing and behavioral biases. Specific errors discussed include forecast errors due to overreacting to recent data, overconfidence, conservatism in updating beliefs, and neglecting sample size. Biases discussed include reference dependence, regret avoidance, house money effect, and mental accounting.
Mental accounting refers to how people separate and evaluate their money mentally based on subjective factors like the source of funds, intended use, and whether gains or losses are being realized. People do not always treat money as fungible or interchangeable due to mental accounting biases. For example, people are more willing to spend windfall gains like bonuses on unnecessary purchases rather than important expenses. They also take more risks with investment accounts than savings earmarked for emergencies. To avoid suboptimal financial decisions due to mental accounting biases, people should treat all funds interchangeably, have a coherent investment strategy, and avoid overspending leftover budgets.
Book presentation: Excess Returns: a comparative study of the methods of the ...Frederik Vanhaverbeke
This is a pdf presentation of the book Excess Returns: a comparative study of the methods of the world's greatest investors. The presentation explains the various topics that are discussed in the book and show plenty of practical examples to understand the main points. It challenges the Efficient Market Hypothesis by showing some extraordinary track records in the investment world. It explains where top investors look for bargains. It shows how they perform a due diligence and how they value stocks. A separate section is devoted to the way top investors buy and sell various types of stocks, and how they buy and sell over stock market cycles. It also explains the various psychological aspects that top investors deem essential to beat the market.
After many years of underperformance, emerging markets exhibited strong returns in 2017 and may continue their rally. Emerging markets include nations transitioning to more stable political and economic systems with a rising middle class. They are more volatile than developed markets but provide diversification. Many emerging market indicators like GDP, investment, and production are still early in their economic cycles and may see continued growth outperforming developed markets. Earnings growth is also fueling emerging market stock gains, and valuations remain well below long-term averages, suggesting further upside potential. While volatility will remain, conditions support maintaining emerging market allocations.
Emotions Affect Markets in Predictable Ways: Behavioral Finance and Sentiment...Cristian Bissattini
Financial markets are not purely rational. Emotions play a large part in stock pricing. H2O Sentiment Analysis captures these emotions, the “animal spirits” coined by Keynes, through social media post messages.
We employ a novel way to capture and quantify sentiment based on authors' credibility, namely tracking the accuracy of past recommendations. Our results provide evidence that there is strong and useful information on investor sentiment and likely stock market movements.
Our research (done in collaboration with the Università della Svizzera italiana) has demonstrated that we can use this information in order to make predictions about stock price changes and to implement trading strategies based on sentiment analysis that perform, on average, better than traditional investment strategies like Buy and Hold or Moving Averages.
Benjamin Graham was an influential American economist and investor who is considered the father of value investing. He wrote two influential books, Security Analysis and The Intelligent Investor. The Intelligent Investor teaches the distinction between investing and speculation, with investing focused on analyzing companies and protecting against losses, while speculation aims for extraordinary gains. It also covers topics like how to select stocks, dealing with market fluctuations, and the importance of a margin of safety. The book has been hugely influential on investors like Warren Buffett and remains one of the foundational texts on value investing.
The Bond Market, ILFS, ZEE and DHFL Crisis at TC2019Deepak Shenoy
Deepak Shenoy of Capitalmind.in presents at Traders Carnival TC2019 about the IL&FS Crisis, what's happening with ZEE, the issue at DHFL and a bond market primer.
Small Business Economic Trends Report from NFIB -- July 2015NFIB
After giving up over 4 points in June, NFIB's Small Business Optimism Index clawed back 1.3 points in July, a familiar theme now, which has produced the most grudging gains in the
Index’s history – and still not above the 42 year average of 98. Expectations for business conditions and real sales gains accounted for half of the net gain in the Index components.
The document discusses the disposition effect, which is the tendency of investors to sell winners too early and hold on to losers too long. This effect can be explained by prospect theory, mental accounting, regret aversion, and self-control issues. An empirical study analyzed individual investor trades between 1964-1970 and found that around 40% of realized trades were losses, contradicting the prediction of tax-motivated trading alone. Both disposition effects and tax considerations together can explain the patterns observed.
1) The document discusses behavioral finance concepts including the efficient market hypothesis and limits to rational decision making.
2) Key behavioral concepts explored are prospect theory, heuristics, and cognitive biases that can influence financial decisions.
3) Limits to arbitrage like noise trader risk and short-selling constraints may allow irrational prices to persist temporarily despite arbitrage.
"Opportunities and Pitfalls in Momentum Investing" by Gary Antonacci, Author ...Quantopian
Presented at QuantCon Singapore 2016, Quantopian's quantitative finance and algorithmic trading conference, November 11th.
Gary will begin by explaining the origins and history of momentum investing. He will show why momentum is called “the premier anomaly.” He will describe the way momentum is most commonly used and why this may not be the best approach. He will discuss the hidden risks associated with momentum and other factor based investments.
Using easily understood examples and historical research findings, he will show how relative strength momentum can enhance investment returns, while trend-following absolute momentum can dramatically decrease risk exposure.
Gary will show which assets are best to use for momentum investing. Finally, he will describe the behavioral biases you must deal with and the mind set you need to become a successful momentum investor.
In this talk you will learn how to:
a) Spot the best momentum investment opportunities in any market environment.
b) Protect yourself from bear market risk exposure and behavioral biases.
c) Construct your own low-cost, rules-based dual momentum portfolio that is simple to understand and easy to maintain.
The document provides an introduction to fundamental analysis for new investors. It discusses analyzing a company's financial statements including earnings, earnings per share, price-to-earnings ratio, dividend yield, dividend payout ratio, book value, price/book ratio, and price/sales ratio. The objective of fundamental analysis is to use these tools to determine a company's intrinsic value and decide whether to buy, hold, or sell its stock.
The document discusses fundamental analysis for investing, which involves analyzing financial metrics like earnings, cash flow, and debt to evaluate a company's performance and determine its intrinsic value. It covers the objectives, types, and tools of fundamental analysis such as evaluating financial ratios like the P/E ratio, dividend yield, and return on equity. The document also discusses the strengths of fundamental analysis in identifying long-term trends and undervalued companies, as well as its weaknesses including being time-consuming, subjective, and prone to analyst bias.
PE ratio is a metric that compares a company's stock price to its earnings per share. It indicates how much an investor pays for each dollar of earnings. A PE ratio is calculated by dividing the current stock price by the earnings per share. PE ratios help investors compare similar companies and determine if a stock is undervalued, appropriately priced, or overvalued. Factors like growth rates, profit margins, returns, macroeconomic conditions, and intangible assets can impact a company's PE ratio. Comparing a company's PE ratio to its industry peers provides useful insight into how the market values that company.
Warren Buffett rarely invests in tech stocks because he often does not understand them, which is outside his area of expertise. Unless an investor understands a company's business model and the drivers of future growth, they risk being blindsided. Fundamental analysis attempts to determine a company's value by focusing on internal factors like finances, management, and products, as well as external factors such as the economy and interest rates, to evaluate growth potential and investment risk. Performing various financial ratio calculations and comparing them over time and between competitors can provide important insights for fundamental investors.
The document discusses concepts from behavioral finance that influence investor behavior and markets, including herd behavior, anchoring, and various calendar effects. It provides an overview of each concept and recent evidence questioning whether strategies like "Sell in May" have been reliable. The conclusion acknowledges that while machines now influence markets, human behavior still plays a role, and deep research is needed to overcome cognitive biases and take a long-term view of investing.
The document discusses the limitations of using "Up Market Capture" and "Down Market Capture" ratios to predict the future performance of investment managers. It finds:
1) There is little persistence or consistency in a manager's UMC/DMC ratios over time, indicating they are not predictive of future performance.
2) The predictive power of UMC/DMC ratios for subsequent periods is mixed - sometimes they correlate with performance and sometimes they do not.
3) Categorizing markets as simply "up" or "down" oversimplifies the many factors that drive market performance, limiting the usefulness of UMC/DMC ratios.
The document concludes UMC/DMC ratios are essentially
This document discusses the benefits of a multi-manager investing approach over relying on a single manager. It argues that combining complementary managers with differing styles can provide market-beating returns while reducing risk, analogous to how a team with different player types is more likely to succeed than relying on a single star player. The document also stresses the importance of ongoing monitoring to ensure the right managers are being utilized depending on changing market conditions.
This document provides summaries of Warren Buffett's advice on investing based on excerpts from Berkshire Hathaway annual letters and other sources. It advises investing in low-cost index funds rather than trying to pick stocks or time the market. Buffett believes investors should ignore forecasts, have discipline by sticking to their investment plan, and not overreact to short-term market movements. The document suggests developing a written investment plan and controlling emotions to invest successfully like Buffett advocates.
I'm looking for 2 people that want to change their current situation.
See how $18, one time, can change your situation in one year. There is strength in numbers. Teamwork makes the dream work. Take a look here >>> http://tinyurl.com/kb7luuf
http://Kaea80.4c4all.com
http://flow77.4c4all.com
http://unitedlove1.4c4all.com
This document summarizes key concepts in behavioral finance, which models how psychological factors influence investor behavior. It discusses two categories of irrationalities: errors in information processing and behavioral biases. Specific errors discussed include forecast errors due to overreacting to recent data, overconfidence, conservatism in updating beliefs, and neglecting sample size. Biases discussed include reference dependence, regret avoidance, house money effect, and mental accounting.
Mental accounting refers to how people separate and evaluate their money mentally based on subjective factors like the source of funds, intended use, and whether gains or losses are being realized. People do not always treat money as fungible or interchangeable due to mental accounting biases. For example, people are more willing to spend windfall gains like bonuses on unnecessary purchases rather than important expenses. They also take more risks with investment accounts than savings earmarked for emergencies. To avoid suboptimal financial decisions due to mental accounting biases, people should treat all funds interchangeably, have a coherent investment strategy, and avoid overspending leftover budgets.
Book presentation: Excess Returns: a comparative study of the methods of the ...Frederik Vanhaverbeke
This is a pdf presentation of the book Excess Returns: a comparative study of the methods of the world's greatest investors. The presentation explains the various topics that are discussed in the book and show plenty of practical examples to understand the main points. It challenges the Efficient Market Hypothesis by showing some extraordinary track records in the investment world. It explains where top investors look for bargains. It shows how they perform a due diligence and how they value stocks. A separate section is devoted to the way top investors buy and sell various types of stocks, and how they buy and sell over stock market cycles. It also explains the various psychological aspects that top investors deem essential to beat the market.
After many years of underperformance, emerging markets exhibited strong returns in 2017 and may continue their rally. Emerging markets include nations transitioning to more stable political and economic systems with a rising middle class. They are more volatile than developed markets but provide diversification. Many emerging market indicators like GDP, investment, and production are still early in their economic cycles and may see continued growth outperforming developed markets. Earnings growth is also fueling emerging market stock gains, and valuations remain well below long-term averages, suggesting further upside potential. While volatility will remain, conditions support maintaining emerging market allocations.
Emotions Affect Markets in Predictable Ways: Behavioral Finance and Sentiment...Cristian Bissattini
Financial markets are not purely rational. Emotions play a large part in stock pricing. H2O Sentiment Analysis captures these emotions, the “animal spirits” coined by Keynes, through social media post messages.
We employ a novel way to capture and quantify sentiment based on authors' credibility, namely tracking the accuracy of past recommendations. Our results provide evidence that there is strong and useful information on investor sentiment and likely stock market movements.
Our research (done in collaboration with the Università della Svizzera italiana) has demonstrated that we can use this information in order to make predictions about stock price changes and to implement trading strategies based on sentiment analysis that perform, on average, better than traditional investment strategies like Buy and Hold or Moving Averages.
Benjamin Graham was an influential American economist and investor who is considered the father of value investing. He wrote two influential books, Security Analysis and The Intelligent Investor. The Intelligent Investor teaches the distinction between investing and speculation, with investing focused on analyzing companies and protecting against losses, while speculation aims for extraordinary gains. It also covers topics like how to select stocks, dealing with market fluctuations, and the importance of a margin of safety. The book has been hugely influential on investors like Warren Buffett and remains one of the foundational texts on value investing.
The Bond Market, ILFS, ZEE and DHFL Crisis at TC2019Deepak Shenoy
Deepak Shenoy of Capitalmind.in presents at Traders Carnival TC2019 about the IL&FS Crisis, what's happening with ZEE, the issue at DHFL and a bond market primer.
Small Business Economic Trends Report from NFIB -- July 2015NFIB
After giving up over 4 points in June, NFIB's Small Business Optimism Index clawed back 1.3 points in July, a familiar theme now, which has produced the most grudging gains in the
Index’s history – and still not above the 42 year average of 98. Expectations for business conditions and real sales gains accounted for half of the net gain in the Index components.
The document discusses the disposition effect, which is the tendency of investors to sell winners too early and hold on to losers too long. This effect can be explained by prospect theory, mental accounting, regret aversion, and self-control issues. An empirical study analyzed individual investor trades between 1964-1970 and found that around 40% of realized trades were losses, contradicting the prediction of tax-motivated trading alone. Both disposition effects and tax considerations together can explain the patterns observed.
1) The document discusses behavioral finance concepts including the efficient market hypothesis and limits to rational decision making.
2) Key behavioral concepts explored are prospect theory, heuristics, and cognitive biases that can influence financial decisions.
3) Limits to arbitrage like noise trader risk and short-selling constraints may allow irrational prices to persist temporarily despite arbitrage.
"Opportunities and Pitfalls in Momentum Investing" by Gary Antonacci, Author ...Quantopian
Presented at QuantCon Singapore 2016, Quantopian's quantitative finance and algorithmic trading conference, November 11th.
Gary will begin by explaining the origins and history of momentum investing. He will show why momentum is called “the premier anomaly.” He will describe the way momentum is most commonly used and why this may not be the best approach. He will discuss the hidden risks associated with momentum and other factor based investments.
Using easily understood examples and historical research findings, he will show how relative strength momentum can enhance investment returns, while trend-following absolute momentum can dramatically decrease risk exposure.
Gary will show which assets are best to use for momentum investing. Finally, he will describe the behavioral biases you must deal with and the mind set you need to become a successful momentum investor.
In this talk you will learn how to:
a) Spot the best momentum investment opportunities in any market environment.
b) Protect yourself from bear market risk exposure and behavioral biases.
c) Construct your own low-cost, rules-based dual momentum portfolio that is simple to understand and easy to maintain.
The document provides an introduction to fundamental analysis for new investors. It discusses analyzing a company's financial statements including earnings, earnings per share, price-to-earnings ratio, dividend yield, dividend payout ratio, book value, price/book ratio, and price/sales ratio. The objective of fundamental analysis is to use these tools to determine a company's intrinsic value and decide whether to buy, hold, or sell its stock.
The document discusses fundamental analysis for investing, which involves analyzing financial metrics like earnings, cash flow, and debt to evaluate a company's performance and determine its intrinsic value. It covers the objectives, types, and tools of fundamental analysis such as evaluating financial ratios like the P/E ratio, dividend yield, and return on equity. The document also discusses the strengths of fundamental analysis in identifying long-term trends and undervalued companies, as well as its weaknesses including being time-consuming, subjective, and prone to analyst bias.
PE ratio is a metric that compares a company's stock price to its earnings per share. It indicates how much an investor pays for each dollar of earnings. A PE ratio is calculated by dividing the current stock price by the earnings per share. PE ratios help investors compare similar companies and determine if a stock is undervalued, appropriately priced, or overvalued. Factors like growth rates, profit margins, returns, macroeconomic conditions, and intangible assets can impact a company's PE ratio. Comparing a company's PE ratio to its industry peers provides useful insight into how the market values that company.
Warren Buffett rarely invests in tech stocks because he often does not understand them, which is outside his area of expertise. Unless an investor understands a company's business model and the drivers of future growth, they risk being blindsided. Fundamental analysis attempts to determine a company's value by focusing on internal factors like finances, management, and products, as well as external factors such as the economy and interest rates, to evaluate growth potential and investment risk. Performing various financial ratio calculations and comparing them over time and between competitors can provide important insights for fundamental investors.
Seminar 7 evaluating companies with financial metricspvalantagul
The document provides an overview of evaluating companies using financial metrics and ratios. It discusses key metrics for analyzing income statements, including revenue growth, operating income growth, EPS growth, margins, and comparisons of metrics between companies. It also covers balance sheet metrics like the current ratio, return on equity, return on assets, and debt-to-equity ratio. The document concludes by discussing common valuation metrics like price-to-earnings ratios and how they can be used to evaluate if a stock is cheap or expensive relative to its peers and growth prospects.
This document discusses 10 financial ratios that can help identify good stocks to buy:
1) Price-Earnings Ratio (P/E) - Compares stock price to earnings per share. Generally lower is better.
2) Price/Earnings to Growth (PEG) Ratio - Adjusts P/E for growth expectations. Less than 1 suggests growth is not fully priced in.
3) Price-to-Sales (P/S) Ratio - Compares market value to sales. Provides value measure when earnings are low or nonexistent.
4) Price/Cash Flow (P/CF) - Focuses on cash generated rather than accounting items like depreciation.
5) Price
Fundamental Analysis by Vivek SrivastavaAxis Direct
Fundamental Analysis is a study of factors (company specific and external environment) that affect the value of stock. This program will help you to understand the impact of factors on the valuation of the stock, analysis of the environment and interpretation of financial statement.
For more information visit : https://simplehai.axisdirect.in/learn/eclasses
Basics of stock market for novice.
DISCLAIMER:
I am NOT an investment advisor nor a financial advisor, and no information provided here is to be interpreted as a suggestion to buy or sell stocks.
Have you ever looked at the news, or at a company’s results, and have had no idea what they mean or how to interpret it?
You know there’s information lurking deep down in the results that you could use to profit from, but you’re never sure where to look. Or exactly what to look at!?
And with reporting season around the corner, just imagine the profit opportunities you could uncover before any other investor if you knew how.
That’s why I want to give you the reporting strategy that you could use to read financial results like a pro.
Stock analysis is a critical skill for any investor, and this guide will walk you through the essential steps of fundamental analysis using Seeking Alpha.
In the first section, I use Visa stock as the example and we review their basic fundamentals. This includes key metrics such as earnings, revenue, P/E ratio, and recent price history.
Next, I compare Visa stock with Mastercard and PayPal across several metrics using Seeking Alpha Premium's stock screener and comparison tool. This section will cover various techniques to compare the revenue and earnings growth for each company, while relating these numbers to their valuation multiple.
Finally, I discuss cash flow and debt metrics to make a final assessment on Visa stock as an investment. This stock analysis guide will show you how to perform your own stock research to determine if a stock is at least worth adding to your watchlist. It is not the end of the process though, as it is recommended your read through earnings reports and momentum signals before making a final decision.
- Earnings per share (EPS) is a key metric used to evaluate companies but has limitations as a measure for evaluating investments.
- While EPS indicates a company's profit per share, it does not provide information about debt levels or cash flow and can be manipulated.
- A better approach is to look at multiple valuation ratios together, including the P/E ratio, price to earnings growth ratio, price to book value ratio, dividend payout ratio and dividend yield to get a fuller picture of a company's performance and strength.
Okay, let's break this down step-by-step:
* Offer price per share is $48
* Mix is 20% cash, 80% stock
* To calculate the exchange ratio, we take the stock portion as a percentage of the total consideration
* Stock portion is 80% of $48, which is 0.8 * $48 = $38.40
* Cash portion is 20% of $48, which is 0.2 * $48 = $9.60
* Total consideration is $38.40 stock + $9.60 cash = $48
* To get the exchange ratio, we take the stock portion ($38.40) and divide it by the acquirer's stock price.
Mel feller looks at creating a more profitable businessMel Feller
Mel Feller Looks at Creating a More Profitable Business
Making a profit is the most important - some might say the only - objective of a business. Profit measures success. It can be defined simply: Revenues - Expenses = Profit. Therefore, to increase profits you must raise revenues, lower expenses, or both. To make improvements you must know what is really going on financially at all times. You have to watch every financial event without any kind of optimistic filter.
This article is a series of questions with comments to help you analyze your profits, their sufficiency and trend, the contribution of each of your product lines or services to them, and to help you determine if you have the kind of record system you need. The questions and comments are not meant to be definitive presentations on the subjects.
Assignment 1: Discussion Question
Sustainable competitive advantage is the "holy grail" of corporate strategy, but it is elusive.
Using all you have learned to date about Harley-Davidson, analyze whether or not Harley-Davidson has a source of sustainable competitive advantage. Defend your answer using examples from your readings, the annual report, and other sources.
Submit your response to the Discussion Area by Saturday, November 30, 2013.
Company Analysis project – BSAD 245 – Fall 2013
These are basic steps you may use when evaluating company cases in my graduate and undergraduate business strategy and business policy courses.
Before you start, you must understand a couple of things.
· This is not meant to be an exhaustive list; there are other steps that can be followed to get deeper into the meaning of the numbers.
· You cannot analyze the numbers in a vacuum. The numbers only provide indicators to trigger further questions in your mind.
· In order to do a thorough job, you must understand something about the company’s business and strategies, and its industry. Financial indicators vary from industry to industry; the ratios can only be interpreted when compared and contrasted with other companies in that industry. For example, financial indicators are (and should be) different among financial institutions, manufacturing companies, companies that provide services, and technology and computer information and services companies.
· Financial analysis is something of an art. Experienced managers, investors and analysts develop a data bank of information over time, and after doing many such analyses, that they bring to bear every time they review a company.
Step 1. Acquire the company’s financial statements for several years. These may be found in a recent annual report; in the company’s 10K filing on the SEC’s EDGAR database; or from other internet sources such as MSNMoney.com or Yahoo.com. As a minimum, get the following statements, for the last 3 years.
· Balance sheets
· Income statements
· Shareholders equity statements
· Cash flow statements
Step 2. Quickly scan all of the statements to look for large movements in specific items from one year to the next. For example, did revenues have a big jump, or a big fall, from one particular year to the next? Did total or fixed assets grow or fall? If you find anything that looks very suspicious, research the information you have about the company to find out why. For example, did the company purchase a new division, or sell off part of its operations, that year? You can easily calculate the dollar amount and percentage amount change for each line item.
Step 3. Review the notes accompanying the financial statements for additional information that may be significant to your analysis.
Step 4. Examine the balance sheet. Look for large changes in the overall components of the company's assets, liabilities or equity. For example, have fixed assets grown rapidly in one or tw ...
Financial statement analysis is important for several reasons such as obtaining loans, evaluating investment opportunities, and assessing creditworthiness for suppliers. The key steps in analysis involve calculating ratios over several years from the income statement, balance sheet, cash flow statement, and shareholders' equity statement. Common ratios calculated include liquidity, leverage/debt, profitability, efficiency, and value ratios. Limitations of ratio analysis include subjectivity in interpretation, lack of comparability between companies, reliance on past financial data, and accounting differences across countries.
The document discusses strategies for creating an investment portfolio based on Nobel Prize-winning academic research. It recommends structuring portfolios to take advantage of factors like company size, relative price, and profitability that have been shown to increase returns. Specifically, it suggests investing more in small and value stocks, as both have higher returns than large or growth stocks over the long run. The document also provides examples of model portfolios that diversify across global stock and bond index funds targeting these factors.
The document discusses various topics related to investing, including:
1) Compound interest and how it allows investments to grow exponentially over time through reinvestment of interest.
2) The three main asset classes - equities, fixed income, and cash equivalents - and how proper allocation between them can optimize returns while minimizing risk.
3) Different types of investments including stocks, bonds, mutual funds and their basic characteristics. Key factors like earnings, price-earnings ratios, and yields are discussed for evaluating investments.
El documento resume las características de las pequeñas y medianas empresas (Pymes) y grandes empresas en España. Las Pymes representan el 99,88% de las empresas españolas, generan el 67,9% de los puestos de trabajo y el 65% del PIB, mientras que las grandes empresas son solo el 0,2% restante pero reciben el 70% de los pagos del gobierno a proveedores y eluden impuestos en paraísos fiscales. También analiza la distribución geográfica de Pymes y grandes empresas.
Artículo de Carles Boix, catedrático en la Universidad de Chicago, "España e Industrialización", publicado en la vanguardia en 2004, (previo a la crisis)
El documento describe los fundamentos de la composición en el arte. Explica que la composición es la estructura del lenguaje visual que permite comunicar el mensaje del artista. Los elementos por sí solos no comunican, sino que es la combinación y disposición de estos lo que transmite la expresión. También analiza conceptos específicos de la fotografía como el encuadre, el punto de interés y el punto de vista, los cuales son elementos clave de la composición fotográfica que permiten comunicar el mensaje deseado.
El documento discute la desaparición de lenguas en todo el mundo y la riqueza lingüística que se pierde con cada lengua que se extingue. Señala que en 2009 había 6,909 lenguas vivas pero que 3,000 podrían desaparecer para fines del siglo XXI. También destaca las diferencias entre lenguas como el castellano y el catalán en términos de perspectivas culturales y mundos conceptuales expresados a través de las palabras.
This document outlines a 12-step process called the "NASDAQ Dozen" for analyzing stocks. It evaluates 12 key metrics for a stock, including revenue, earnings per share, return on equity, analyst recommendations, earnings surprises, earnings forecasts, earnings growth, PEG ratio, industry earnings, days to cover, insider trading, and weighted alpha. For each metric, the document provides guidance on how to assign a "passing" or "failing" grade based on predetermined criteria. It then works through an example analysis of Walmart (WMT) stock, assigning a score to each metric. The overall analysis provides a framework for systematically evaluating the most important factors of a potential investment.
1) El documento presenta información sobre Hipócrates, considerado el padre de la medicina. Vivió entre los siglos V y IV a.C. en la isla de Cos y desterró una plaga en Atenas. 2) Hipócrates creía que los cuatro humores (sangre, flema, bilis amarilla y bilis negra) causaban las enfermedades si estaban desequilibrados. 3) También es el autor del Juramento Hipocrático que aún deben pronunciar los médicos.
The document discusses the benefits of exercise for mental health. Regular physical activity can help reduce anxiety and depression and improve mood and cognitive function. Exercise causes chemical changes in the brain that may help protect against mental illness and improve symptoms for those who already suffer from conditions like depression and anxiety.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
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2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
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In a tight labour market, job-seekers gain bargaining power and leverage it into greater job quality—at least, that’s the conventional wisdom.
Michael, LMIC Economist, presented findings that reveal a weakened relationship between labour market tightness and job quality indicators following the pandemic. Labour market tightness coincided with growth in real wages for only a portion of workers: those in low-wage jobs requiring little education. Several factors—including labour market composition, worker and employer behaviour, and labour market practices—have contributed to the absence of worker benefits. These will be investigated further in future work.
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
1. The NASDAQ Dozen: Analyze a Stock in 12 Easy Steps
Do you suffer from analysis paralysis? Do you have a stock you are interested in buying but you
don't have the foggiest idea of where to even start a proper analysis? We can help.
Investing today is much different than it was 50, or even 20 years, ago. Whereas your parents and
grandparents could only get a limited amount of stock data in the daily newspaper, you have access to a
seemingly unlimited amount of data on every publicly traded stock. This is both a blessing and a curse.
With access to so much information, many investors get lost in the details and are never able to make a
decision. However, if you know where to look, having access to the information can help you make more
informed investment decisions. Let's take a look.
You can actually conduct a thorough analysis of any stock in 12 easy steps: a process we call the
NASDAQ Dozen.
As we get started, it is important to remember that the NASDAQ Dozen is neither a crystal ball nor a
guarantee of success. Rather, it is a rational, repeatable process for analyzing the most important
fundamental and technical aspects of any stock.
You also need to remember that no stock is perfect. If you look hard enough, you can always find
something that is wrong with a stock. On the other hand, if you look hard enough, you can always find
something good about a stock. The trick is to invest in stocks that have more good qualities than bad.
Here's where the NASDAQ Dozen comes in. By looking at 12 key aspects of any stock you are interested
in, you can quickly determine if the stock is one worth pursuing or one better left alone.
To score the 12 factors of the NASDAQ Dozen, you need to assign each factor either a passing or a
failing grade. After you have scored all 12 factors, add up the passing grades and compare them to the
failing grades. If you have a high ratio of passing grades compared to failing grades, you can be more
confident in the stock. Conversely, if you have a low ratio of passing grades compared to failing grades,
you would be less confident in the stock.
For instance, you would feel more comfortable investing in a stock that had 10 passing grades and only
two failing grades-a ratio of 10:2-than you would investing in a stock that only had four passing grades and
eight failing grades-a ratio of 4:8.
Let's get started and learn how to score each of the 12 factors in the NASDAQ Dozen.
When you go to the NASDAQ.com home page, look for the Get Stock Quotes window and enter the ticker
symbol for the stock you are interested in evaluating. In this example, we will enter WMT , the ticker
symbol for Wal-Mart Stores, Inc. (see Figure 1).
Figure 1-NASDAQ.com Home Page
Once you have entered the ticker symbol, a drop-down menu will appear. Click on the Revenue/EPS link
under Fundamentals to get started with the first step in the NASDAQ Dozen (see Figure 2).
3. 1. Revenue - The NASDAQ Dozen
We start the NASDAQ dozen with an analysis of revenue because at its basic level, stock growth starts with a
company making money. Fundamentally, if a company isn't bringing in any money, it can't pass profits along to
its shareholders. In other words, it all starts with revenue.
Why We Look at Revenue
Revenue will give you an idea of how much money the company is making. If revenue is consistently increasing,
this means the company is growing. As the company continues to grow, the stock price will appreciate in value.
How to Score Revenue
• Pass—Give revenue a passing score if revenue is increasing. Start first by comparing the annual totals.
But if the most recent fiscal year is incomplete, compare the most recent quarter with the same quarter in
the previous year.
• Fail—Give revenue a failing score if revenue is decreasing
Looking at the revenue totals for WMT in Figure 3, it should receive a passing score. Fiscal year 2011 had a
higher revenue than fiscal year 2010, but since fiscal year 2012 is incomplete, you also have to look at the most
recent quarter. And as you can see, July 2012 revenue was higher than July 2011 revenue, which gives WMT a
passing revenue score.
Revenue: PASS
Figure 3—Revenue Results
4. The2. Earnings Per Share - The NASDAQ Dozen
next fundamental factor in the NASDAQ Dozen is earnings per
share (EPS). You will find the EPS information by clicking on
the Revenue/EPS for WMT link under Fundamentals in the left menu of the
quotes area (see Figure 4). For more information on earnings per share and
revenue, visit Learning Markets.
Figure 4—Revenue/EPS Link
Why We Look at Earnings per Share
If revenue tells us how much money is flowing into the company, EPS tells us how much of that money is
flowing down to stock holders. EPS tells you how much money the company is making in profits per every
outstanding share of stock. The higher the EPS is, the more money your shares of stock will be worth because
investors are willing to pay more for higher profits.
How to Score Earnings per Share
• Pass-Give EPS a passing score if the EPS are increasing. Start first by comparing the annual totals. But
if the most recent fiscal year is incomplete, compare the most recent quarter with the same quarter in the
previous year.
• Fail-Give EPS a failing score if the EPS are decreasing
Looking at the EPS numbers for WMT in Figure 5, EPS should receive a passing score. Fiscal year 2011 had
higher EPS than fiscal year 2010, but since fiscal year 2012 is incomplete, you also have to look at the most
recent quarter. And as you can see, July 2012 EPS were higher than July 2011 EPS, which means you should
give WMT a passing EPS score.
Earnings per Share: PASS
5. TheReturn on Equity (ROE) - The NASDAQ Dozen
next fundamental factor in the NASDAQ Dozen is return on equity (ROE). You will
find the ROE information by first clicking on the Financials link
under Fundamentals in the left menu (see Figure 6) and then clicking on
the Financial Ratios link at the top of the Company Financials page
(see Figure 7).
Figure 6—Financials Link
Why We Look at Return on Equity
ROE gives us a glimpse into how efficiently company management is producing a return for the owners of the
company---based on the amount of equity in the company. To calculate ROE, you divide the average
shareholders equity during the past 12 months by the net profit the company has made during those same 12
months.
How to Score Return on Equity
• Pass—Give ROE a passing score if ROE has been increasing for two consecutive years.
• Fail—Give ROE a failing score if ROE is decreasing
Looking at ROE for WMT in Figure 7, ROE should receive a passing score since it remained the same from
2009 to 2010 and increased from 2010 to 2011.
Return on Equity: PASS
Figure 7—Financial Ratios Link
6. 4. Analyst Recommendations - The NASDAQ Dozen
Now that you have determined the basic fundamental health of your stock, you
will want to get an idea of what the professionals think about the stock by
reviewing analyst recommendations. To find the analyst recommendations on a
stock, click on the Analyst Research link under Stock Analysis in the left menu
(see Figure 8) and then click on the Recommendations link at the top of
the Stock Research page (see Figure 9).
For more information on understanding analyst research and
recommendations, visit Learning Markets.
Figure 8—Analyst Research Link
Why We Look at Analyst Recommendations
Analysts conduct extensive research on a stock and then issue a recommendation as to what they think the future
holds for the company. If the company's future outlook is positive, the analysts recommend a "buy." If the
company's future outlook is poor, then the analysts recommend a "sell."
How to Score Analyst Recommendations
• Pass—Give analyst recommendations a passing score if the consensus recommendation is a buy or
strong buy.
• Fail—Give analyst recommendations a failing score if the consensus recommendation is less than a
buy.
Looking at the consensus recommendation for WMT in Figure 9, WMT should receive a passing score. Out of
27 total analysts, 1 of them recommended a "buy" while 13 analysts recommended a "strong buy."
Analyst Recommendations: PASS
Figure 9—Analyst Recommendations
7. 5. Positive Earnings Surprises - The NASDAQ Dozen
Earnings Surprises, the next metric in your stock analysis, is also located in the Analyst Research area. To
access it, click on the Earnings Surprise link at the top of the page (see Figure 10).
Why We Look at Earnings Surprises
Companies announce their earnings every quarter. Leading up to this event, analysts will make predictions as to
what they think the earnings per share (EPS) will be. These predictions are often used as a benchmark by
market participants. If the actual EPS comes in higher than the expected amount, this is generally good for the
stock price. If the actual EPS comes in lower than the expected amount, this is generally bad for the stock price.
When analyzing a company's earnings surprise track record, you want to see that the company is consistently
meeting or beating its expectations.
How to Score Earnings Surprises
• Pass—Give the earnings surprises a passing score if the EPS surprises during the past four quarters
have all been positive.
• Fail—Give the earnings surprises a failing score if any of the EPS surprises during the past four quarters
have been negative.
Looking at the earnings surprises for WMT in Figure 10 WMT should receive a passing score. You can see that
in Fiscal Quater End, WMT met the expecations, which is why it is displaying a % surprise of zero.
Positive Earnings Surprises: PASS
Figure 10—Earnings Surprises
8. 6. Earnings Forecast - The NASDAQ Dozen
Earnings Forecast, the next metric in your stock analysis, is also located on the Stock Research page. To
access it, click on the Forecast link at the top of the page (see Figure 11).
Why We Look at Earnings Forecasts
While it is very important to research a stock's past earnings reports, it is also important to look at the future
earnings forecasts to insure that the future profitability of the stock in question is strong.
How to Score Earnings Forecast
• Pass—Give the earnings forecast a passing score if the consensus EPS forecast numbers increase year
over year.
• Fail—Give the earnings forecast a failing score if the consensus EPS forecast numbers do not increase
year over year.
Looking at the earnings forecast for WMT in Figure 11, WMT should receive a passing score. You can see that
the consensus EPS forecast numbers are increasing year over year.
Earnings Forecast: PASS
Figure 11—Consensus Earnings Forecasts
9. 7. Earnings Growth - The NASDAQ Dozen
Earnings Growth, the next metric in your stock analysis, is also located on the Stock Research page. To access
it, click on the Earnings Growth link at the top of the page (see Figure 12).
Why We Look at Earnings Growth
The earnings growth number gives you an idea of how much analysts believe earnings are going to grow per year
for the next five years.
How to Score Earnings Growth
• Pass—Give earnings growth a passing score if the Long Term 5-year number is greater than 8%.
• Fail—Give earnings growth a failing score if the Long Term 5-year number is less than 8%.
Looking at earnings growth for WMT in Figure 12, WMT should receive a passing score. You can see that the
Long Term 5-year number is greater than 8%.
Earnings Growth: PASS
Figure 12—Forecast Earnings Growth
10. 8. PEG Ratio - The NASDAQ Dozen
PEG Ratio, the next metric in your stock analysis, is also located on the Stock Research page. To access it,
click on the PEG Ratio link at the top of the page (see Figure 13).
Why We Look at the PEG Ratio
One of the more popular ratios stock analysts look at is the P/E, or price to earnings, ratio. The drawback to a
P/E ratio is that it does not account for growth. A low P/E may seem like a positive sign for the stock, but if the
company is not growing, its stock's value is also not likely to rise. The PEG ratio solves this problem by including
a growth factor into its calculation. PEG is calculated by dividing the stock's P/E ratio by its expected 12 month
growth rate.
For more information on utilizing the PEG ratio, visit Learning Markets.
How to Score the PEG Ratio
• Pass—Give the PEG Ratio a passing score if its value is less than 1.0.
• Fail—Give the PEG Ratio a failing score if its value is greater than 1.0.
Looking at the PEG ratio for WMT in Figure 13, WMT should receive a failing score. You can see that the PEG
Ratio is above 1.0.
PEG Ratio: FAIL
Figure 13—PEG Ratiov
11. 9. Industry Price-Earnings - The NASDAQ Dozen
To find the industry earnings for the industry a stock belongs to, click on the Analyst Research link under Stock
Analysis in the left menu (see Figure 14) and then scroll down to the bottom of the page.
Figure 14—Analyst Research Link
Why We
Look at Industry Earnings
Most investors are interested not only in how much the company is earning
but also how the company's earnings compare to the average earnings of
companies in the industry. Typically, if a company is earning more than the
average for the industry, it is a good sign for the company's stock.
How to Score Industry Earnings
• Pass—Give Industry Earnings a passing score if the company's
earnings are higher than the industry's earnings.
• Fail—Give Industry Earnings a failing score if the company's
earnings are lower than the industry's earnings.
Looking at the Industry Earnings for WMT in Figure 15, WMT should receive a failing score. You can see that
WMT's earnings are lower than the industry's.
Industry Earnings: FAIL
Figure 15—Industry Earnings
12. 10. Days to Cover - The NASDAQ Dozen
Days to Cover, the next metric in your stock analysis, is located on
the Short Interest page. To access it, click on the Short Interest link
under the Fundamentals heading in the left menu (see Figure 16).
Why We Look at Days to Cover
Short interest is the number of shares that investors are currently short on a
particular stock. Days to cover is the number of days---based on the
average trading volume of the stock---that it would take all short sellers to
cover their short positions.
Figure 16—Short Interest
For instance, if a stock has a short interest of 20 million shares and an average trading volume of 10
million shares, days to cover would be two days (20 million / 10 million = 2 days).
How to Score Days to Cover
• Pass—Give Days to Cover a passing score if the
number of days is less than 2 days.
• Fail—Give Days to Cover a failing score if the
number of days is more than 2 days.
Looking at Days to Cover for WMT in Figure 17, WMT
should receive a failing score. You can see that WMT�s
Days to Cover is more than 2 days.
Days to Cover: FAIL
Figure 17—Days to Cover
13. 11. Insider Trading - The NASDAQ Dozen
Insider Trading, the next metric in your stock analysis, is located on the Insider Form 4 page. To access it, click
on the Insider Form 4 link under the Holdings heading in the left menu (see Figure 18).
Figure 18—Insider Form 4 Link
Why We Look at Insider Trading
Insider trading can give you a glimpse into how confident the managers of the
company are in the prospects for the company. If managers are confident in the
company, chances are good that they will be buying stock in the
company. Anytime you see insiders buying stock, it is typically a good sign.
How to Score Insider Trading
• Pass—Give Insider Trading a passing score if the net activity for the past
3 months has been positive.
• Fail—Give Insider Trading a failing score if the net activity for the past
3 months has been negative.
Looking at Insider Trading for WMT in Figure 19, WMT should receive a failing score. You can see that net
activity for the past 3 months has been negative.
Insider Trading: FAIL
Figure 19—Insider Trading
14. 12. Weighted Alpha - The NASDAQ Dozen
Weighted Alpha is the last metric in your stock analysis, and this one takes a few more clicks to get to. First, go
to the main menu and hover over the Market Activity tab. Once the sub-tab appears, click on the Sector
Analysis link (see Figure 20).
Figure 20—Sector Analysis Link
On the Sectoring by Industry Groups page, enter the ticker symbol of the stock you are interested in and click on
the GO button (see Figure 21).
Once the results appear from your search, click on the link for the industry which the stock belongs to---it is
typically the second link down (see Figure 21).
Why We Look at Weighted Alpha
Weighted Alpha is a measure of one year growth with an emphasis on the most recent price activity. A positive
Weighted Alpha indicates the stock price is moving higher and a negative Weighted Alpha indicates the stock
price is moving lower. Naturally, when you are looking at buying a stock, you want to see a stock that is
increasing in value, not decreasing in value.
Figure 21—Industry Link
How to Score Weighted Alpha
• Pass—Give Weighted Alpha a passing score if the number is positive.
• Fail—Give Weighted Alpha a failing score if the number is negative.
Looking at Weighted Alpha for WMT in Figure 22, WMT should receive a failing score. You can see that
number is negative.
Weighted Alpha: FAIL
15. Putting it All Together
1. Revenue PASS
2. Earnings Per Share (EPS) PASS
3. Return on Equity (ROE) PASS
4. Analyst Recommendations PASS
5. Earnings Surprises PASS
6. Earnings Forecast PASS
7. Earnings Growth PASS
8. PEG Ratio FAIL
9. Industry Earnings FAIL
10. Days to Cover FAIL
11. Insider Trading FAIL
12. Weighted Alpha FAIL
TOTAL 7:5
Figure 22—Weighted Alpha
This is a negative score. But now that you�ve done all of this, what does it really mean? Is it a guarantee the
stock will go up? Certainly not. Investing is an exercise of analyzing information and putting your money where
you have the most confidence and the greatest likelihood of success. There are no guarantees.
Typically, stocks with NASDAQ Dozen ratios of 12:0 to 9:3 are strong candidates for growth, stocks with ratios
of 8:4 to 6:6 are moderate candidates for growth and stocks with ratios below 6:6 are poor candidates for
growth.
Using the NASDAQ Dozen arms you with the data you need to make an informed decision and to put the odds of success
in your favor. To get started, check the stocks you currently have in your portfolio and see how they stack up. You may be
surprised.