Transcript Chapter 4

Chapter Four
Sources of Investment Information
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McGraw-Hill/Irwin
© 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.
Aggregate Economic Data
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Federal Reserve Bulletin
Federal Reserve Banks
Survey of Current Business
Websites and Economic Date
Other Sources of Economic Data
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Federal Reserve Bulletin
Published Monthly
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Domestic Financial Statistics
Federal Reserve Banks
Monetary and Credit Aggregates
Commercial Banks
Financial Markets
Federal Finance
Securities Markets and Corporate Finance
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Federal Reserve Bulletin cont.
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Real Estate
Consumer Installment Credit
Domestic Nonfinancial Statistics
International Statistics
Securities Holdings and Transactions
Interest and Exchange Rates
www.federalreserve.gov
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12 Federal Reserve Banks
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Federal Reserve Bank of St. Louis
Comprehensive Economic Statistics
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U.S. Financial Data
Monetary Trends
International Economic Trends
National Economic Trends
www.stlouisfed.org/default.html
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Federal Reserve Economic Data
(FRED)
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Historical financial data
Historical economic data
Monthly reserves
Interest rates
Commercial banking data
Gross domestic product (GDP)
Regional economic data
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Survey of Current Business
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Published monthly
Bureau of Economic Analysis of the U.S. Department
of Commerce
Major outlet for economic time series data
Extremely helpful for industry analysis
Excellent statistics
Great details and sub-categories, example
• Lumber, production statistics
 Hardwoods
 Softwoods
• Douglas fir trees
• Southern pine
• Western pine
http://www.bea.gov/beahome.html
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Survey of Current Business cont.
List of major series updates
GDP, GNP
Consumer price index (CPI)
National income
Production price index
Personal income
Construction put in place
Industrial production
Banking
Housing starts and permits Consumer installment credit
Retail trade
Stock prices
Labor force,
Value of export & imports
unemployment, & earnings
Manufacturers’ shipments,
inventories, & orders
Motor vehicles
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Websites and Economic Data
Websites
www.economy.com
Comments
Free & fee-based research on
 Economy
 Finance
 Country
 Industry
Offers comprehensive & timely
analysis & data
www.economy.com/dismal  Covers 180 economic
indicators for 40 different
countries
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Websites and Economic Data
Websites
www.economagic.com
Comments
Comprehensive site of free and
easily available
 Economic time series data
100,000 time series
 Customizable reports
 Access to data in Excel format
 Check their “Most Frequently
Requested Series”
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Other Sources of
Economic Data
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Websites
www.gpoaccess.
gov/indicators/
Comments
Provides economic information on
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Prices
Wages
Production
Business activity
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Purchasing power
Credit
Money
Federal finance
Economic Report of the President:
Current and foreseeable trends and annual numerical
goals concerning topics such as
• Employment
• Production
• Real income
• Federal budget outlays
 Employment objectives for significant groups of the
the labor force
 Annual numeric goals
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 A program for carrying out program objectives
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www.gpoaccess.
gov/eop/index.ht
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Investment Advisory Resources
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Mergent (Moody’s)
Standard & Poor’s
Value Line
Morningstar
Other Investment Resources
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Mergent (Moody’s)
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Historical financial information
The Manuals divided into categories:
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Finance & Banking
Industrial
Municipals & Government
OTC Industrial
Public Utility
Transportation
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Mergent (Moody’s) Online
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Internet-based access to
• Detailed
• Accurate
• Comprehensive global company database
Features & functions:
• Batch printing
Mergent Online
 EDGAR® documents
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Mergent Online continued
• Cross-border searching across multiple
databases on a variety of financial and text
variables
• Export company reports & financial information into
 Microsoft® Word
 Microsoft® Excel
• View PDF files
 Adobe® Acrobat® Reader
• Compare reports of multiple companies
• Speed and reliability
• Customer service, & On-site training
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Materials to assist users and encourage use
Technical support service for data and technical issues
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Standard & Poor’s
www.standardandpoors.com
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A subsidiary of McGraw-Hill (the publisher of this textbook)
Comprehensive coverage
Corporation Records -12,000 publicly held US & International
companies
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Balance Sheet
Income Statement
Corporate profiles
Subsidiaries
SEC reports
Stock Reports
Industry Surveys
Register of Public companies
Register of Private companies
News
 Press Releases
 Company’s market
performance
 Technical evaluation
 Insider activity
 Key stock statistics
 Analysts’ consensus
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Value Line
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Raw financial data
Trendline growth rates
Price history patterns in graphic form
Quarterly
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Sales
Earnings
Dividends
Sales & profit margins by line of business
www.valueline.com
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Value Line (cont.)
A Unique Evaluation System
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Historical relationships
Regression analysis
Ratings 1 through 5
• “1” highest positive
• “5” lowest
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Timeliness
Safety
Valuation has minimum human judgment
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Morningstar
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Products for:
• Investors
• Finance professionals
Products include:
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Morningstar Mutual Funds
Morningstar No-Load Funds
Morningstar Investor
Morningstar Mutual Fund 500
Morningstar Variable Annuity/Life
Performance Reports
www.morningstar.com
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Morningstar continued
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Stocks and Exchange Traded Funds
(EFTs)
Morningstar Ascent – individual investor
Morningstar Principia investment professional
Principia Plus
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Other Investment Resources
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Dun & Bradstreet “Key Business Ratios”
• 14 significant ratios
Current assts/current debt
 Net profits/net sales
 Total debt/tangible net worth
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• 800 different lines of business by SIC code
www.dnb.com
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Other Investment Resources continued
D&B Million Dollar Directory (print & online)
New, intuitive user interface
 Updated online "Help” system
 Search on NAICS & SIC codes is now
supported
 Running list of search criteria has been
added
 Improved sorting feature will now sort any
number of records
 "Jump To" feature allows you to find a specific
record quickly
 Automatic authentication between domestic &
international databases
www.dnbmdd.com
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D&B's Million Dollar Databases
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Other Investment Resources continued
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RMA Annual Statement Studies
• Published by Robert Morris Associates
• 150 industry classifications
• Comparing data
Balance sheet
 Income statement
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Other Investment Resources continued
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Thompson Financial
Thompson Research
• Current
• Historical
 Analyst reports
 Filings
• 30,000 companies worldwide
TM
• SDC Platinum database of
Merger
 Acquisition
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Other Investment Resources continued
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Thomson’s IRChannel
• First Call earnings estimates
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Retail stock brokers
Analysts
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Merrill Lynch
Salomon Smith Barney
Paine Weber
Prudential Securities
Research & info on:
 Industry
 Company
 Bond market analysis
 Futures
 Commodities
 Options
 Tax Shelters
• Oil
• Gas
• Real Estate
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SEC Filings, Periodicals, and
Journals
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Security and Exchange Commission Filings
Periodicals and Newspapers
Journals
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Securities and Exchange
Commission (SEC)
Primary mission:
 Protect investors
 Maintain the integrity of the securities markets
Investors goals:
 Help secure their futures
 Pay for homes
 Send children to college
www.sec.gov
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SEC continued
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10-K report – annual
most popular
8-K report – significant changes
10-Q report quarterly
• Quarterly financial statements
• Changes in stockholdings
• Legal proceedings
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Common violations that may lead
to SEC investigations
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Insider trading: buying or selling a security in
breach of a relationship of trust and confidence
while in possession of material, non-public
information about the security
Misrepresentation or omission of important
information about securities
Manipulating the market prices of securities
Stealing customers' funds or securities
Violating broker-dealers' responsibility to treat
customers fairly
Sale of securities without proper registration
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Security and Exchange
Commission Filings
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SEC website
www.sec.gov
• “Filings & Forms (EDGAR)
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Information on numerous investor issues
• Regulations
• Special studies
• Securities related litigation
EDGAR = Electronic Data Gathering, Analysis,
& Retrieval (SEC filings database)
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Periodicals and Newspapers
Magazines:
 Fortune
 Business Week
 Forbes
 Financial World
 Money
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Periodicals and Newspapers cont.
Financial sections of newspapers in:
 Chicago
 Dallas
 Cleveland
 New York Times (exceptional coverage)
 The Wall Street Journal (most popular)
 Barron’s Business and Financial Weekly
 Investor’s Business Daily
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Periodicals and Newspapers cont.
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The Wall Street Transcript
Commercial and Financial Chronicle
Financial Times (www.ft.com)
Industriscope (by Media General)
Source of:
• Fundamental analysis, &
• Technical indicators
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Journals
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Financial Analysts Journal
The Journal of Portfolio Management
Institutional Investor
Journal of Finance
Journal of Financila Economics
Journal of Financial & Quantitative Analysis
Journal of Financial Education
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Databases
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S&P’s COMPUSTAT
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www.compustat.com
50 years of data
50,000 North America and Global companies
Financial data
Market data
Comparisons between
Industries
 Companies
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Databases continued
EXAMPLE – Using COMPUSTAT, one screen
for companies that meet the following
criteria:
1. Dividend yield greater than 4%
2. Earnings growth greater than 15% per year
3. P/E ratio less than S&P’s 500 Stock Index
4. Market price less than book value
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Databases continued
Other Sources of Data
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Interactive Data Corporation
CRSP Database
Bloomberg’s Professional Financial Service
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Financial instruments
Real-time data access
Current news
Headlines
Audio
Television reports
Proprietary analytical tools
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The Internet and Investment
Information
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Alert & wary using online data
• Check for reliability
• Source of data
• Check for clues
Date of data
 Last update
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Additional Websites
Stock exchanges
NYSE
www.nyse.com
Chicago
NASDAQ
www.cbot.com
www.cboe.com
www.nasdaq.com
AMEX
London
www.amex.com
www.londonstockexchange.com
Provide information such as:
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Volume
Historical data
Trading data
 Bid & ask prices
 Stock quotes
 Regulatory issues
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Class Project Websites
Websites
Comments
moneycentral.msn.com/investor
Information on investing,
news, and financial data
money.cnn.com
Current information about
markets and companies
www.bloomberg.com
Market news and data
www.freerealtime.com
News, information and real
time quotes
finance.yahoo.com
Information about investing,
companies and markets
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Websites
Comments
www.thestreet.com
Information and opinion about
markets and companies
www.business.com
Business-specific search
engine and business
information
www.businessweek.com
News and business
information—requires fee
www.wsj.com
Wall Street Journal online—
requires fee
www.financialtimes.com
Financial Times online—most
articles require fee
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Websites
Comments
www.forbes.com
Forbes online—some
information requires fee
www.stocksandnews.com
News and commentary on
stocks and markets
www.moneychimp.com
Stock analysis and educational
information
www.economy.com
Various forms of economic
information
www.stls.frb.org
St. Louis Federal Reserve Bank site—
includes FRED (Federal Reserve
Economic Data) with historical,
financial and economic data on the
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U.S.
Websites
Comments
www.bigcharts.com
Create stock price charts
www.financewise.com
Finance-only search engine
www.economagic.com
Directory site of economic data
collections
www.investorlinks.com
Directory site of financerelated websites
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Summary
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Investors finding relevant information
Were to look and what to look for
Guidance and sample data
Investors’ problems
• Find usable information
• Timely
• Relevant
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Summary
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Too many sources
haunt beginners
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Could solve problem of finding good data in library
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Process increases awareness of the types of
information available.
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