My Account Store Store
SSG Tutorial

March 16, 2004 - ICLUB News

ICLUB Insider March 16, 2004


NAIC Stock Prospector Power Tip
Finding Stocks to Study

Ever get the feeling that there just aren't any stocks worth adding to your portfolio? Instead of trying to interpret the "noise" coming out of the mouths of talking heads on your television set, why not try a more refined method of uncovering interesting stocks for study? NAIC Stock Prospector lets you use sophisticated stock screening techniques to eliminate unworthy companies from consideration, freeing you to focus on the important elements of research and analysis on a short list of individual companies and industries.

NAIC Stock Prospector works with NAIC's Online Premium Services datafiles, providing a database of more than 7,000 companies from which you can build a screen to identify stocks that meet your personal criteria. Once you've whittled down those 7,000 stocks to a manageable few, move on to research those companies that look most interesting.

If you're new to stock screening, the software simplifies the process by allowing you to choose from a list of pre-defined criteria. Several of these use NAIC-suggested guidelines to help you find high quality growth companies. Just select the chosen criteria set and the software generates a list of those stocks that fit the bill.

To give you a taste of NAIC Stock Prospector's power, ICLUBcentral uses the program to create a list of Growth Companies to Study each month. The screen uses the "NAIC 1" criteria to identify companies with solid and consistent historical and projected EPS growth; you can see the results of the most recent screen at:

For more information on NAIC Stock Prospector, or to download a demo, please visit:

Doug Gerlach Joins ICLUBcentral In NAIC Member-Focused Role

ICLUBcentral recently announced the appointment of Douglas Gerlach, author of several books and websites on investing, as Vice President of NAIC Products. Gerlach will concentrate on ICLUBcentral's offerings to the membership of NAIC and in particular will work directly with NAIC members and NAIC's national volunteer network to maximize customer satisfaction with NAIC software products and services.

Gerlach will be replacing longtime NAIC investing authority Richard Beaubien, who is retiring from full-time work but will continue to represent ICLUBcentral at NAIC events and in other capacities from time to time. "Of course it will be hard for anyone to completely fill Rich's shoes, but I believe that we could not have found a more qualified and energetic replacement" said ICLUBcentral CEO Robert Brooker. "Doug has been a great asset in the past as Editor-in-Chief of the Investor Advisory Service, and we've witnessed the tremendous insights and energy he has demonstrated in his role on NAIC's Computer Group Advisory Board, so we couldn't be happier about his joining our team."

To view the full press release on Gerlach's appointment, please visit:

Join ICLUBcentral At CompuFest 2004

For 14 years, the NAIC Computer Group Advisory Board has presented its annual CompuFest conference focusing on computerized investing, helping to educate thousands of attendees on making the best use of NAIC's software and online tools. CompuFest 2004 will be held June 18-20, 2004 at the Adam's Mark Hotel in St. Louis, MO -- and ICLUBcentral's team will be part of the proceedings.

CompuFest has gained a reputation as a well-rounded program of seminars and hands-on training, with classes targeted at beginners and experienced investors alike. A key element of the conference is the instruction provided on each of NAIC's software programs, including NAIC Investor's Toolkit, NAIC Stock Analyst, NAIC Stock Prospector, NAIC Classic, NAIC Club Accounting and NAIC Personal Record Keeper. Instructors from the Computer Group Advisory Board and ICLUBcentral will help you make the most of your financial software, as well as teach new concepts to help you build a more profitable portfolio. In the hands-on computer lab, you can try out programs for the first time, or practice new skills that you've learned, with the assistance of instructors and other experienced users.

Many past attendees report that CompuFest is one of the best and most cost-effective ways to increase your financial knowledge. Make plans today to attend!

For more information, visit:

Part 2 of a Series: What Is the NAIC Stock Selection Guide All About?
Evaluating Management
by Ralph Seger; President, Investor Advisory Service

(Editor's Note: NAIC's Stock Selection Guide is the cornerstone of the Investor Advisory Service, and is used by Ralph Seger and the analysts at Seger-Elvekrog to select and follow each company included in the newsletter. In this issue, we are pleased to offer the first of a multi-part series of tips that delve into the basics of the SSG and how it can best be used to identify stocks for your portfolio.)

After you've reviewed page one of the SSG, next turn to Section 2, "Evaluating Management," at the top of the reverse page. In Section 2A, compare the percent pre-tax profit margin on sales of the company being investigated with competitors and the industry norms.

In Section 2B, "percent earned on equity capital" is a traditional way to compare management ability of companies in the same industry.

After-tax profits reinvested in the company are a source of funds to finance expansion. Debt, increasing accounts payables and issuance of stock can also be used to finance expansion, however, there are limitations imposed by the capital markets. As long-term and short-term debt rise above reasonable levels, risk also increases.

Debt, though, is a double-edged sword. During good times, a company is able to use the cost of debt (which is usually less than the cost of equity capital) to leverage operations upward. During economic recessions, the reverse situation rears its ugly head, and the interest to be paid on debt can become a drag on profits. Good management is judicious about employing appropriate amounts of debt. You can check a company's debt levels on a Value Line report, in the box in the upper left side of the report headed "Capital Structure." One of the pieces of data you should consider is the coverage of interest requirements by pre-tax profits. Some industries are little affected by economic cycles and can easily pay debt interest. Others tend to be adversely affected by a downturn in the economy. Generally, interest coverage of 6 to 7 times in good times will translate into adequate coverage during a stressful economic period.

There is also a theoretical measurement of the rate of return on reinvested capital that measures the sustainable growth of the company's earnings. The assumption is that the fraction of after-tax earnings reinvested into the company at the rate of return on equity capital will furnish the funds required to sustain growth. On a Value Line report, see the second to last line in their display of data entitled "Retained to Common Equity," or calculate the rate yourself as follows:

    % Return on equity x (1 - Dividend payout ratio) = Sustainable growth rate

This is a theoretical concept and not always realistic. However, it does pay to look at Retained to Common Equity and judge whether it is sufficient to support long-term growth. If the figure falls somewhat short of expectations of future growth rate, see if the debt to equity ratio is rising at an unsustainable rate or there are other signs of stress in the capital structure.

To be continued....

For more information on the Investor Advisory Service, please visit

Clearance Sale
Investor's Toolkit Manuals

We wish we had a dime for every time we heard someone say that the user's manual alone for NAIC Investor's Toolkit is worth the price of the software. Well, we don't -- but we do have a closet full of these user manuals, and we're selling them to make room for the other exciting things that can go in a closet.

This weighty tome is over 400 useful pages long and is spiral-bound for your reading ease. Nearly every page includes a screenshot, and the whole thing is printed in a very pleasing sans serif font. It's hard to write this without feeling like we're hawking commemorative plates on QVC, but the fact of that matter is that once these are gone, they're gone. Toolkit hasn't shipped with a printed manual since last August (though there is a PDF manual on every disk), so when these are sold, we don't plan to print any more.

With or without the software, the book teaches a heck of a lot about NAIC methodologies and doubles as mean paperweight. To obtain one of the final editions of this opus (no doubt a collector's item in the near future), check with Customer Support for availability and instructions for ordering.

Product Buzz: Updates on our NAIC Software Products

Is your computer fitted out with the latest and greatest NAIC software? Here's an overview of the programs currently offered by ICLUBcentral:

NAIC Classic (Plus).....................................Current Version: 2.1.0001
Order ]        [ Info ]        [ Download demo ]       

NAIC Investor’s Toolkit (Pro).........................Current Version: 4.0.18
[ Order ]        [ Info ]        [ Download demo ]        [ Updates ]       

NAIC Take Stock............................................Current Version: 4.0.018
[ Order ]        [ Info ]        [ Download demo ]       

NAIC Stock Analyst....................................Current Version: 3.0.0001
[ Order ]        [ Info ]        [ Download demo ]        [ Updates ]       

NAIC Stock Prospector...............................Current Version: 2.5.0037
[ Order ]        [ Info ]        [ Download demo ]       

NAIC Club Accounting..................................Current Version: 2.5.11
[ Order ]        [ Info ]        [ Download 2.3.5 demo ]        [ Updates ]       

NAIC Online Club Accounting................................Always Current!!
[ Order ]        [ Info ]        [ Demo website ]       

2003 NAIC Club Tax Printer.......................Current Version: 1.0.0020
[ Order ]        [ Info ]        [ Download ]       

2003 NAIC State Tax Printer.......................Current Version: 1.0.0017
[ Order ]        [ Info ]        [ Download ]       

Read past newsletters, subscribe, or unsubscribe at:

Copyright 2004 ICLUBcentral Inc. All rights reserved.

Newsletter Archive

Subscribe to newsletter

Unsubscribe from newsletter

About    Press    Management    Privacy Policy    Terms of Service    Contact

copyright © 1989 - ICLUBcentral Inc. or its affiliates