In This Issue:
What's Up with the Down Market?
by Doug Gerlach,
President, ICLUBcentral Inc.
It's been a turbulent week in the U.S. stock markets, with the Dow Jones Industrial Average and Standard & Poor's 500 Index posting some big declines, only to bounce back with some gains. Concerns about the possibility of another recession, how our elected representatives are handling the federal deficit, and the situation in the European economy have generated a good deal of volatility in the markets. The question of many of our customers is how are these factors changing our investment strategy?
The answer is that the current market volatility is changing nothing about our approach to investing in stocks. For long-term-focused investors, though, short-term gyrations in stock prices have no impact on a plan of selecting high-quality stocks and holding on to them as long as fundamentals warrant. The only change the current circumstances bring to smart investors is that as panic drives stock prices lower, some companies may become more reasonably valued. In times like these, it can be quite profitable to be buying stocks when the opportunity presents itself. Certainly, it's not the time to be "moving to cash" or pulling money out of the market or be selling off shares of high-quality companies.
Is the current market climate changing your investment strategy?
Speak out here!
Find Industry Leaders in Stock Prospector
by Doug Gerlach,
President, ICLUBcentral Inc.
Our Stock Prospector screening software is a powerful tool for finding stocks that meet any customized criteria. One powerful way to use the program is to seek out companies that lead their industries in any of several different criteria.
There are many factors that differ significantly according to a company's industry. Some industries are faster growing than others, and profit margins vary greatly by industry group. In Stock Prospector, you can use Industry Averages when constructing criteria to find companies that have figures or ratios that are higher on average than other similar companies in the same industry group, or to find companies across all industries that rank higher when compared with their own peers.
Here's an example. If you wanted to find the fastest-growing companies in all industries, select Hist 5Yr EPS Gr (the company's historical five-year percentage EPS growth rate) in the Report Item field, then enter a greater than sign (>) in the Criteria field. Right-click and select Industry Average Item to automatically select the industry average for 5-year EPS growth rates. The criteria will look like this:
Hist 5Yr EPS Gr > [Industry Average - Hist 5Yr EPS Gr]
Run the report and you'll find all stocks with EPS growth rates that are higher than the average EPS growth rate for their own industry groups.
(Note: There is another selection in the popup menu called Industry Average Field List that lists all the available fields. You can open this and choose from the list, but it's easier to use the automatic selection method detailed above instead. If you were looking to compare stocks with growth rates higher than the industry average P/E ratios or some other similar value, you could use the Field List instead.)
This type of heavy-strength screening is essential during times of market volatility if you invest in the best. Find the true leaders of an industry and you're more likely to be on the path to investing success.
Learn more about Stock Prospector.
One Year Ago in the Investor Advisory Service
In the September 2010 issue of the Investor Advisory Service newsletter, our analysts recommended Perrigo Company, a Michigan-based maker of store-brand medicines. This midsized company had revenues in 2010 of $2.3 billion and had grown earnings per share at an annualized rate of 17.2% since 2001. How have the company and its stock performed in the year since it was recommended?
When IAS profiled Perrigo Company (ticker: PRGO) in the September 2010 issue, shares were trading at under $57. The manufacturer of generic medications, most of which are sold over the counter, was benefiting as squeezed shoppers abandoned name-brand drugs in favor of the cheaper store brands. Organic growth from both new products and better pricing was bolstered by three recent acquisitions. IAS estimated the company could earn $3.50 in 2011, lending shares a forward P/E of about 16.
Shares soon started to rise along with the broader stock market. The stock price came down briefly after November's earnings, but rallied again to trade between $60 and $70. In January, Perrigo announced the purchase of Paddock Labs. The IAS analysts considered the price a little rich, but investors cheered, sending PRGO shares up a leg from $66 to $74....
Read more....
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August 11, 2011
We're ICLUBcentral Inc.
We develop high-quality software products and web services for individual fundamental investors, and powerful accounting tools used by the majority of US investment clubs.
Address:
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Madison Heights, MI 48071
ICLUB Links:
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Events Calendar:
First Tuesday of each Month: Toolkit 6 User Group led by Doug Gerlach, ICLUBcentral Inc.
Third Tuesday of each Month: New Investment Club Orientation led by Doug Gerlach, ICLUBcentral Inc.
Doug Gerlach will also be speaking at the following events:
Aug. 16, 2011: Investment Club Operations Webinar; What's on Your Club's Watch List?
Doug Gerlach, Speaker
Sept. 6, 2011: Toolkit 6 User Group Webinar;Toolkit 6: The Basics
Doug Gerlach, Speaker
Sept. 8, 2011: Retail Investors Conferences; Doug Gerlach, Speaker
Sept. 15-18, 2011: BetterInvesting National Convention; Cincinnati, Ohio
Doug Gerlach, Speaker
ICLUBcentral, Exhibiting
Nov. 4-5, 2011: Puget Sound BetterInvesting Chapter Education Conference; Mercer Island, WA
Doug Gerlach, Speaker
Nov. 10-12, 2011: AAII Investor Conference; Las Vegas, Nevada
Doug Gerlach, Speaker
ICLUBcentral, Exhibiting
Submit Your Event!
Like 7-Eleven, we're not always doing business, but we're always open — go to the ICLUB Store and outfit yourself with the simple, yet powerful tools and services that smart investors have been using to grow their portfolios since 1989.
Got a Problem?
Support is here to help. You can reach them M-F, 9:30 AM-6:00 PM at 877-33-ICLUB (877-334-2582), or use the e-mail web form at ICLUB Support. |
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