Industry Analysis and Reasearch Tools

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Brian Meier

February 15, 2011



Industry Analysis

Research Tools

Examples◦ Presentation

◦ Report



Industry Analysis

Research Tools


◦ Report



Specific branch of manufacturing, service,or trade

Consists mainly of company competitors

Collection of producers of perfectsubstitutes



Future revenues Market size Threat of competitors

Relative cheapness stock Short-term stock price pressure



Product differentiation Existence of monopolies Patents held by other companies

Technological/procedural advancements Barriers to entry Foreign trade policy



4 P’s◦ ProductQualityBrand name

◦ PlaceMarket locationDistribution methods

◦ PromotionAdvertisingSales force

◦ PriceProduct demandCosts



World Economics U.S. Economics

◦ Economic andMonetary IndicatorsUnemployment Rate

Industrial ProductionDurable OrdersCorporate ProfitsRetail SalesHousing Activity

◦ No one indicator is

most important◦ Composite of 11

leading indicators

Global Economy

U.S.

Economy

Sector

Industry

Company



Takes advantage of industry trends Positioned to capture/create market share Demonstrated effective management

decisions New products in pipeline News releases



Economic Data:◦ Economic Statistic Briefing Room:

www.whitehouse.gov/fsbr/esbr.html

Industry Data:◦ www.morningstar.com

Competitors:◦ www.investors.com

◦ www.finance.yahoo.com

◦ www.morningstar.com

◦ www.wsj.com



Industry Analysis

Research Tools


◦ Report



Stock ReportsStock Picking

Company AnalysisFundamentals

Technical Analysis

Industry Analysis

Competitive Analysis

Stock Re-evaluations

Sector Reviews Industry/Economic Reports



The IC provides many resources which arenot free to the public:Wall Street Journal

Investor’s Business Daily

MorningStar

GATECH has other resources available:See library – Value Line

Many free research tools available onlineMSN Money

Yahoo! Finance

BigCharts.com



Our timeline is infinite. Focus on extensive analysis of the current

economic trends

Work on refining our outlook for futureeconomic trends

Invest in issues we hope to hold for a longperiod of time



At bottom of this next pageclick “Deluxe StockScreener” to install the

MSN … YOU MUST USEINTERNET EXPLORER –after all this is MSN!



You can save yoursearches or importsaved ones under theFILE menu.

In the GTSFIC PrivateDocs section of thewebsite is a greatCANSLIM based stockscreener [.IFF file]

You can (and should)try to make your own,since the above onewill not always returna high # of stocks!



Another great source for stock ideas is theInvestors.com IBD 100 list.

You can download these atwww.investors.com – look on the lefttoolbar for IBD 100

Use our GTSF login

NOTE: Some of the stocks towards thetop of this list will already be‘discovered’ – watch this list frequentlyto see which ones are moving up!

http://www.investors.com/

http://www.investors.com/



Another great tool is available at the GTlibrary.

Contains several lists including:◦ Most Timely Industries

◦ Timely stocks

◦ Timely stocks in timely industries

◦ Highest yielding stocks

◦ Biggest "Free-Flow" Cash Generators

◦ Stocks with widest discounts from Book Value◦ Stocks with highest percentage earned on capital

There is both a general and Small/Mid Capedition



Three basic things make a stock worth asecond look:FundamentalsValueIndustry

Fundamentals: Usually, unless you havesome evidence otherwise, a company withbad fundamentals will continue to have badfundamentals (all things equal)

Value: It could be a great stock, but a Joe

stock Industry: Could be a great, cheap stock, but

if its in the wrong industry, it WILL NOTperform well

Exhibit A:

Joe Stock



Yahoo! Finance (http://finance.yahoo.com)is my personal favorite for fundamentals.

Also MSN Money, SmartMoney.com,

Investors.com, MorningStar.com

Yahoo!Finance Toolbar

MorningStarEPS GrowthChart

http://finance.yahoo.com/

http://finance.yahoo.com/



What are you looking for?◦ Profit and Operating Margins need to be as high as

possible

◦ ROA and ROE (ROI) need to be as high as possible

◦ Quarterly and yearly earnings growth needs to bepositive (especially for a small company)

◦ Low debt and Debt/Equity ratio

◦ Institutional Ownership needs to be less than 70-80%, especially if it is a growth stock

◦ Dividend (if applicable) is always a plus These are just a few GENERAL rules, use your

head and ALWAYS compare any numbers tothe INDUSTRY!!!



Look at the balance sheet (found onfinance.yahoo.com also)

Look at increases in spending on capitalgoods, equipment, long term investments,property plant and equipment, intangible

assets, etc. Avoid companies with too many red items in

any of their financial statements. Compare financial reports, recent news, and

price movements to information on a stock’sAnnual Report.

You can find the Annual Report on acompany’s given website. This is usuallyunder Investor Relations.



Also use the Key Ratios from Yahoo! ANDtechnical analysis (coming up soon) toVALUE a company.

Make sure the P/E, P/B, P/S ratios arelower or equal to the industry average forthe company.

Look at a stock chart to see if the

company has already had a run-upPAY ATTENTION TO VOLUME AND PRICE MOVEMENT



BIGCHARTS.COM



ALWAYS include a 50 and 200 day SimpleMoving Average (SMA)

Under moving averages, select SMA – then enter “50,200” inthe box next to it

Look at both Long and Short term charts, butDON’T use technical analysis on anythingover 1 year!

Things to include: Volume, Relative Strength

Index (RSI), Money Flow, PE over time, RollingEPS, MACD (advanced), momentum – useInvestopedia when in doubt!



Compare your company to an index andits industry.

Analyze Index and Industry choices with

your Mentor in order to find the right fit. If you can’t find the right fit, bring in up to

three possible charts and IDG will find theone that fits the stock price chart best.



http://www.fmcenter.org - Financial MarketsCenter

http://globinvestor.com – Lots of Stuff http://www.wto.org/ - Global Trade Issues http://www.nber.com/ - Economic researcher’s

publications http://www.bls.gov - Bureau of Labor Statistics http://www.bea.gov/bea/dn1.htm - Latest GDP

figures http://www.bea.gov/bea/regional/data.htm -

Regional/State Economic Data http://www.bea.gov/bea/di1.htm - International

economic and trade data

http://www.fmcenter.org/

http://globinvestor.com/

http://www.wto.org/

http://www.nber.com/

http://www.bls.gov/

http://www.bea.gov/bea/dn1.htm

http://www.bea.gov/bea/regional/data.htm

http://www.bea.gov/bea/di1.htm

http://www.bea.gov/bea/di1.htm

http://www.bea.gov/bea/regional/data.htm

http://www.bea.gov/bea/dn1.htm

http://www.bls.gov/

http://www.nber.com/

http://www.wto.org/

http://globinvestor.com/

http://www.fmcenter.org/



1. Do not fall in love with any stock2. Know everything about the company and its

competitors3. Fundamentals are the key to long-term investing;

technical analysis is just a tool

4. Avoid companies with too much debt5. Look for companies with products hot today andtomorrow

6. Know the industry outlook like the back of your hand7. Know who’s managing the company and where

they’re taking the company8. Never stop researching the economy9. Read about the market daily10. Do not fall in love with any stock



Thank You!

Questions?

Industry Analysis and Reasearch Tools

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