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Industry Averages Enhanced at MyStockProspector.com
We have released a change in the way that industry averages are calculated in our MyStockProspector.com Web-based stock screening program. The tool has always been able to display industry averages for all the fields in the database — just search for entries where the EXCHANGE = INDUS — but we have always used simple averages for these values.
With our most recent update, we now weight all industry averages by the revenues of the companies in that industry. This should offer some more relevant data points for comparisons of companies within an industry under study.
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Surviving Bull and Bear Markets
Reprinted from the Mutual Fund Informer
Is a growling bear or a charging bull dominating the market these days? Either way, it's important to know the difference between the two dynamics and how to maintain equilibrium in a bear market.
Quite simply, in a bull market stock prices are generally rising and in a bear market, stock prices are generally falling. Markets are prone to cycles, where a bear market follows a bull market and vice versa. In the late 1990s, investors rode an unprecedented bull market that continued for so long some analysts began to suggest the possibility that the long-running market cycle was dead. But such conclusions were premature, as the market's downturn in the spring of 2000 proved.
The official definition of a bear market is a 20 percent drop from a market high. A steep market decline can thrust market indexes into a bear market overnight, while market rallies can quickly bring indexes back into bull territory. Bear markets are often slow, grinding declines over months or even years, not dramatic dips like the market crash of 1929. The bear market of 1973-74 left the S&P 500 down more than 50 percent in a nearly two-year period, and it didn't recover its pre-bear market value for almost a decade. Read more . . .
Analyzing a Company with a Short History
Reprinted from the SmallCap Informer
Many members of the nonprofit investor organization BetterInvesting rely on the Toolkit 6 software program for analysis. The first page of the stock study typically is a view of the past 10 years of a company's financial history, with an eye to determining consistency of past growth and the strength of that growth.
But what if you're examining a company that may have only have a few years of data available because the company went public fairly recently? Although the lack of a longer track record can make it more difficult to evaluate a company without a decade-long historic record, there are still various options to get more background on a company on your radar.
When reviewing companies with shorter histories, we like to see three years of operating history. You may not have a company's three-year record as a publicly traded stock, but the idea is to discern some insight into the direction the company's business is headed. Are revenues and earnings growing? What are its risks and competitive environment like?
You can dig up quite a bit of financial data for companies that began trading shares on a public exchange in recent years by delving into the period prior to its going public. Primary among these is the S-1 Registration Statement companies file with the Securities and Exchange Commission. This lengthy, comprehensive document details how a company plans to use capital it hopes to raise in its initial public offering and the various competitive and risk factors it faces, as well as details about major investors, the executive team and much more. Read more . . .
Webinar Recap: Top Websites for Toolkit 6 Stock Research
If you missed our latest educational webinar, it's not too late to catch up on this one to learn some valuable tips. This webinar, conducted May 7, 2013, featured Doug Gerlach's ultra-informative presentation on top websites for research when analyzing a stock using Toolkit 6.
To follow up, click here.