Research

Hanley

How do you guys do it?

Where are the best (and most reliable) sources of information?

Obviously those in the industry probably have a bit of an advantage here, but for an outsider, where's the best place to get information on blue chip and less well known US stock?

ixus

Resources I use are mentioned here:

Websites:

www.thepropertypin.com
http://www.nakedcapitalism.com/
http://www.calculatedriskblog.com/
http://ftalphaville.ft.com/
www.greenenergyinvestors.com - goldbugs & great for analysis on miners.
http://tickerforum.org/ - nutcases but have pretty accurate information and as close to real time as a forum gets
http://www.acrossthecurve.com/
http://globaleconomicanalysis.blogspot.com/
http://traderfeed.blogspot.com/

Books:

1.Reminisence of a Stock Operator
2.Market Wizards
3.Traders guns & Money
4.Trend Following

I'd add:

Charts at Futuresource
Trade2win for some trading strategies/info
Eurointelligence is something I recently found.
Macro Man
Aleablog
Fistfulofeuros

Sign up for Roubini's newsletters on RGEMonitor

Bookwise; I'd add Liars Poker & Krugmans "The Return of Depression Economics" & "The Way of the Turtle - Curtis Fatih"

My view is that, unless you're getting realtime info, short term trading is a serious uphill battle. However, if you can form a view of the economic situation (mainly from the economic blogs), it really helps. Always be a skeptic when the economic data is bad and a company is telling you they are fine. When the trend changes to the positive side in terms of manufacturing/confidence etc, look to be long indexes.

Can't help on individual stocks info.

Raskolnikov

Nothing beats the annual/quaterly/interim reports. If I'm looking at a company, it's my first port of call. The only issue with them, is that companies can lie (see the Irish banks for an example of this), so you can never take them as a guarantee.

Here are some key criteria for me.

• Insider buying (the more you see, the better)
• Debt (in my eyes, this should never be above working capital)
• No. of outstanding shares (Companies continually issuing more shares is a red flag, you don't want your holding being diluted continuously)
• Crookedness of management (a lot of CEO's/directors run companies as their personal piggy-banks)

Personally, I am always very sceptical of recommendations from anyone. I would nearly go as far as saying that you should bother getting "expert" opinion from any analyst/blog/website.

Hanley

Raskolnikov wrote: »

Nothing beats the annual/quaterly/interim reports. If I'm looking at a company, it's my first port of call. The only issue with them, is that companies can lie (see the Irish banks for an example of this), so you can never take them as a guarantee.

Here are some key criteria for me.

• Insider buying (the more you see, the better)
• Debt (in my eyes, this should never be above working capital)
• No. of outstanding shares (Companies continually issuing more shares is a red flag, you don't want your holding being diluted continuously)
• Crookedness of management (a lot of CEO's/directors run companies as their personal piggy-banks)

Personally, I am always very sceptical of recommendations from anyone. I would nearly go as far as saying that you should bother getting "expert" opinion from any analyst/blog/website.

How does one find out about insider buying?? I know it'll be disclosed in part in the interim/annual report, but I assume most directors have other means of buying without disclosing. Be it thru funds or whatever....

I assume you're talking about debt due > 1 year when you say you think it should not be above working capital?

thebang

I hope I am not stating the obvious or hopelessly antiquated, but I have been meaning to read Security Analysis by Benjamin Graham for some times now.
I do'nt have the inside knowledge that ixus would have of brokers research, but I do subscribe to some of his comments about it. cI viewed a 'merger model' report from Deutche Bank on Pfizer/Wyeth recently and I jest coundnt see what they were getting at in the price target, which they pinned a $25 (for pfizer). Its since gone to about $11 dollars I think, from about $15. In summary I dont believe any of these people!
Having said that, I am forming the opinion that it may be worth selling on analyst advice see this
http://en.wikipedia.org/wiki/Biovail
I would have to get some more data to back this up, but I would be interested to see if sell recommendations are more often right than buy recommendations over a long period.

Raskolnikov

Hanley wrote: »

How does one find out about insider buying?? I know it'll be disclosed in part in the interim/annual report, but I assume most directors have other means of buying without disclosing. Be it thru funds or whatever....

The annual report will usually disclose the amount of shares that are held by management.

Further detail on transactions are filed on the SEC (US stocks) or ISE (Irish stocks) websites. Regardless of what sort of transaction is made by management, it has to be filed. Both websites should let you search by company name and you should be able to get a history.

Hanley wrote: »

I assume you're talking about debt due > 1 year when you say you think it should not be above working capital?

What I mean, is that the amount of debt a company has, should never be above the assets of a company (cash, property, trade and receivables). If you want to think of it in terms of houses and mortgages. A bank will (or rather, shouldn't!) let you owe more money on your house, than what the house is worth. If a company owes more than what it's worth, it's inevitably going to face problems paying back this debt, especially in todays climate.

Hanley

Raskolnikov wrote: »

The annual report will usually disclose the amount of shares that are held by management.

Further detail on transactions are filed on the SEC (US stocks) or ISE (Irish stocks) websites. Regardless of what sort of transaction is made by management, it has to be filed. Both websites should let you search by company name and you should be able to get a history.

Hmmmm... coolers. Thanks.

What I mean, is that the amount of debt a company has, should never be above the assets of a company (cash, property, trade and receivables). If you want to think of it in terms of houses and mortgages. A bank will (or rather, shouldn't!) let you owe more money on your house, than what the house is worth. If a company owes more than what it's worth, it's inevitably going to face problems paying back this debt, especially in todays climate.

I think we were getting our wires crossed....

I was looking at working capital as current assets less current liabilities.

What you're suggesting seems close enough to Gramham's net asset value model ([current assets less all liabilities]/no of shares right?), and trying to pick a stock trading below that value??

I guess looking at interest cover ratios and stress testing that up to see how they'd deal with a rise in interest rates and a decline in profits would be a useful tool to use as well.

Hanley

thebang wrote: »

I hope I am not stating the obvious or hopelessly antiquated, but I have been meaning to read Security Analysis by Benjamin Graham for some times now.
I do'nt have the inside knowledge that ixus would have of brokers research, but I do subscribe to some of his comments about it. cI viewed a 'merger model' report from Deutche Bank on Pfizer/Wyeth recently and I jest coundnt see what they were getting at in the price target, which they pinned a $25 (for pfizer). Its since gone to about $11 dollars I think, from about $15. In summary I dont believe any of these people!
Having said that, I am forming the opinion that it may be worth selling on analyst advice see this
http://en.wikipedia.org/wiki/Biovail
I would have to get some more data to back this up, but I would be interested to see if sell recommendations are more often right than buy recommendations over a long period.

I have the intelligent investor sitting on my book shelf half read... would it make more sense to read it or security analysis first?

woodseb

thebang wrote: »

I hope I am not stating the obvious or hopelessly antiquated, but I have been meaning to read Security Analysis by Benjamin Graham for some times now.
I do'nt have the inside knowledge that ixus would have of brokers research, but I do subscribe to some of his comments about it. cI viewed a 'merger model' report from Deutche Bank on Pfizer/Wyeth recently and I jest coundnt see what they were getting at in the price target, which they pinned a $25 (for pfizer). Its since gone to about $11 dollars I think, from about $15. In summary I dont believe any of these people!
Having said that, I am forming the opinion that it may be worth selling on analyst advice see this
http://en.wikipedia.org/wiki/Biovail
I would have to get some more data to back this up, but I would be interested to see if sell recommendations are more often right than buy recommendations over a long period.

so you didn't understand an broker report leading you to form an opinion that analyst recommendations and generally worthless?

maybe you should learn a bit more about security analysis first before you write all of it off. Most come up with price targets based on certain assumptions, and these targets are based on a 12 month view. Analysts do not have a crystal ball so you have to accept that there is a degree of uncertainty in every recommendation. If everything was known and certain there would be no point in trading or making recommendations

Maintaining BUY rating and our $25 price target
Our 12-month price target of $25 is based upon a target multiple of 10.2 times our '10 forecast of $2.44, roughly in line with the group, and below the market, which we view as realistic given the higher visibility of earnings (synergy driven), which will offset patent losses.

that's from the deutsche report which you mentioned. the reasoning is quite clear, whether you agree with the assumption is a different matter

thebang

I will concede that the post was written in haste at lunch looks a wee bit stupid in hindsight and I think I deserved the first part of my dressing down, and I understand that price targets form a longer view than a couple of weeks.
But to the punchline - I dont really see how the merged company's will be much more predictable or effective-Deutsche seem very much to be following the company's line. Who knows if synergies are going to be realised or if Wyeth's earnings will be any more predictable than Pfizer's. There seems IMO to be no compelling reason why the merger is greater than the sums of its parts, and a 60% premium over $15 is a big amount. Thats what I did'nt 'get'.

thebang

thebang wrote: »

I do'nt have the inside knowledge that ixus would have of brokers research, but I do subscribe to some of his comments about it.

Aplogies to ixus for misquoting him, I meant raskilnikov.
In response to the OP, I just want to get Security Analysis so I can see how companies hold up in its framework. As for how it compares to the Intelligent Investor - I do'nt know yet! Maybe it is a bit heavy, but from what people say about it, it sounds like a book that will always be valuable and would not be a waste of money