Research for stock ideas is the topic of this article. Where and what to read, good placed to just follow stock prices etc…
How and why
Traditional stock research in Warren Buffet way start by reading yearly SEC filings by the company. That is the DIY way from ground up. However as we live in the era of the internet, you should use the information that is already available and done by others as mainly source. The reason I say this is because, if there is nothing written about the stock, It is rarely worth the effort also to invest in.
There are many good places that write articles on stocks in blog format like I do. Also some message boards can give info but are much more unreliable as sources than written articles. Your broker might give you free access to professional analyst reports but I don’t see them much better than what you read free on internet. Main reason is that most active managers do worse than index funds so why would I listen them then. There are some exceptions to this rule how ever.
The top places to get stock information according to me are….
Seeking Alpha is a platform for investment research, with broad coverage of stocks, asset classes, ETFs and investment strategy. In contrast to other equity research platforms, insight is provided by investors and industry experts rather than sell-side analysts. Seeking Alpha has three outstanding characteristics:
The Motley Fool is dedicated to helping the world invest — better. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, mutual funds, and premium investing services.
Harvest was built to solve the antiquated, inefficient and expensive communication infrastructure across the investment management industry. Harvest is used by investors, allocators, advisors and intermediaries and promotes beneficial transparency among relevant investors. Over 10,000 of the world’s top investment firms trust Harvest to more efficiently communicate with existing, and prospective, clients and investors.
This blog. I read all of the previous and will do my best to select best ideas for me and you invest in. So if you want some filtering, just stay in my blog and I won’t flood this blog with unmeaningful posts. I however encourage you to read also other articles. But I recommend to focus of dividend stocks and dividend growth stock articles for best info.
For stock news and stock prices I use ca.finance.yahoo.com
Canada site because it still uses the old format opposed to US site but has all same stock related news feeds for US stocks.
Know your important metrics
When reading articles you will be faced with some amount of terms and acronyms that you should know. Also you should have basic knowledge which metrics are important for each type of stock. Here is short crash course for you.
P/E or PE is Price per earnings. Meaning how many multiple stock price is compared to the earnings of the stock. If for example P/E is 10, it takes 10 years for company to earn the money of the stock price.
P/B is price per book value. Book value is value of the company if all the assets were sold. So if P/B is for example 2.0, stock is likely to believed to have growth potential as price is much higher than book value.
PEG is P/E divided with growth. So if company has P/E of 10 and growth rate of 20%(per year) →
PEG=10/20=0.5 (official way)
I personally however calculate it differently so that end result is comparable to P/E
Dividend yield x%. Is calculated by dividing dividend per share by stock price
FFO is funds from operations. This is used to valuate real estate companies and REITs. It comparable to PE but is calculated differently due to unique nature of REITs
FFO = Net Income+ Depreciation + Amortization – Gains on Sales of Property