In This Issue:
Carry Out Industry Research with StockCentral
By Doug Gerlach
Part of the process of researching a stock is to compare a company to similar companies in the same industry. This helps you identify the stocks that stand head and shoulders above their peers. If you can identify a company with higher pre-tax profit margins, a lower debt-to-equity ratio, and a greater rate of return on equity than its peers, then you may have found a winner!
Using StockCentral's tools, the task of industry research can be made much easier. The StockCentral Stock Screener is designed to help you find stocks that meet your personal criteria as strong potential candidates for investment, but it can also help you find and compare stocks in particular industries.
To use the Stock Screener, log in to StockCentral and click the Tools tab, then click the Stock Screener item. You'll notice right away that the first selection item is Industry. In fact, the easiest screen you can build is to simply select one industry from the list, and then click the "Find Stocks" button. This will give you a list of all the companies in that selected industry group. (Tip: Hold down the Ctrl key on your keyboard and click to select multiple industry groups!)
To make the list more useful, let's return to the screen builder page and add some additional criteria. For Size, select "Mega" for the Maximum. The screener then finds all companies with a size no larger than the "Mega" category (those with annual sales of $15 billion). In other words, this selection tells the screener to display all companies in that industry along with a column with the size in Sales of each.
Likewise, we can add some other criteria, such as:
- Insider Ownership %: Minimum "0"
- Debt-Equity Ratio: Minimum "0"
- ROE Trend: Minimum "Down"
- Pre-tax Profit Margin Trend: Minimum "Down"
Note: Some caution is required in selecting these choices, since in some cases these criteria will eliminate certain companies from the screener results, generally because those companies have some anomalies in their data reporting that make them unlikely candidates at any rate. Feel free to go ahead and select the highest or lowest criteria for other options and see how it affects the results. Click Find Stocks again to run the screen with the new criteria. The resulting companies are displayed in alphabetical order, but when you display the screener results, you can click a column heading to sort the table by that column. Click the column header again to sort in the opposite order.
Now you can quickly scan the list and find companies in which pre-tax profits and return on equity are stable or trending upwards, and those that have lower debt-to-equity ratios than their peers. You can sort the companies from smallest to largest (or vice versa), and you can even download the results to an Excel spreadsheet for further review.
When you're finished, don't forget that you can save your screen; the next time you return to the site, you can view updated results for all the companies. If you take the time to create screens for several industries, you can quickly check out how the companies in those industries are stacking up. The Stock Screener "User Guide" has more details on using the program.
You must be a StockCentral member in order to use the Stock Screener, though, so join StockCentral (or sign up for your free 45-day trial) today!
Join the Club!
By Amy Rauch Neilson
Think back to one of your very first jobs. Whether it was scooping ice cream at the local Baskin-Robbins (my first job), or a position that required professional training or a college degree, you likely entered the world of work with more enthusiasm than knowledge. Your employer knew when he or she hired you that it was going to take some time for you to learn the ropes -- whether that meant making the perfect chocolate malt or mastering the company's inventory system. In other words, you were an "investment" -- and your employer was betting that in time, his or her investment in you would pay off.
It's much the same with an investment club. Just like a company, investment clubs welcome new members for the breath of fresh air and new ideas that they bring with them, while also hoping that, in time, they will absorb the world of investing, roll up their sleeves and begin working alongside them, studying stocks and making presentations.
Too Much, Too Fast
That's the ideal scenario. But, suffice it to say, it doesn't always work out that way -- either in the real world or in an investment club. Such was the case with the Crow River Investment Club in Minneapolis, Minn. "We nearly doubled our club membership in 2007, going from nine members to 15," explains Club Vice President Lynn Ostrem. "Then, just recently, and very suddenly, we lost three of the six new members.
"Did we miss seeing something in the departing three that could have prevented us from inducting them, in the first place?" Lynn now asks herself. "Could we have done something differently, in the beginning, to motivate them into wanting to learn this stuff? And when we see that someone isn't working out, how can we move them to a resolution faster?"
Read more...
InvestEd 2008 a Smash Success!
Thank you to everyone who attended this year's InvestEd event in Charlotte, North Carolina. It was an excellent opportunity for investors of all ages and levels of experience to learn from the best investment minds while mingling with like-minded investors, discussing stock ideas, discovering new companies from the many corporate presentations, and learning about stock analysis tools, web sites, and methods. The InvestEd team of volunteers put together a fabulous event and are to be congratulated for their efforts.
If you missed InvestEd 2008, save the date and make plans to attend InvestEd 2009! Next year's premier investor education conference will be held in Salt Lake City, Utah from August 7th through 9th. The schedule of classes already promises to be even better than at this year's event, and many corporate sponsors have already committed to attending InvestEd 2009. Even better, many attendees have already signed up at the event in Charlotte to attend next year's conference!
Mark this date in your calendar now -- August 7-9, 2009, in Salt Lake City, UT -- and make plans to join us for InvestEd 2009.
| August 14, 2008
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