CORESSG QUICK START GUIDE (12/15) PAGE 1

How to Open a New Study, Open a Saved Study

What Is the Stock Selection Guide?The Stock Selection Guide (SSG) isBetterInvesting’s primary stock analysis tool,which organizes a company’s historicalfinancial data to help investors identify thecharacteristics of quality growth companiesand to enable plotting of potential futuregrowth from historical trends. The SSG alsoorganizes historical price and P/E data tohelp an investor determine a reasonableprice to pay for the stock.

The online CoreSSG tool presents the coreconcepts and conservative guidelines of theStock Selection Guide methodology in aneasy-to-use, step-by-step format for the newinvestor.

Click on the My Studies icon to open the Portfolios and Studies page.

How to Access

To open a newstudy, enter aticker into the

green box on themember homepage and click

GO

-OR-

Click on MyStudies to go toyour library ofsaved studies.

Enter a new ticker andclick on New Study.

Mouse over an existingstudy and click to open.

CORESSG QUICK START GUIDE (12/15) PAGE 2

Analyze Growth – Step 1 – Historical Sales

Easy Navigation

Click on the Analyze Growth tab at the top and select Step 1:Historical Sales toreview the sales data. Look for companies whose sales growth is strong andconsistent.

Review recent quarterlydata by viewing the opencircles in the chart or thedata in the table.

Review annual dataplotted in solid lines onthe chart.

Review the Educationpanel to see the basicconcepts for the data item.

The CoreSSG is broken up into five tabs, with each tab having one or more steps tocomplete. Review all the steps in each tab, starting from left to right, to completethe SSG.

-OR- Click on the Next button to complete each step in order.

Review growth rates inthe table.

CORESSG QUICK START GUIDE (12/15) PAGE 3

Analyze Growth – Step 3 – Sales, EPS, Price Review

Analyze Growth – Step 2 – Historical EarningsClick on the Next button at the top or select Step 2:Historical Earnings toreview the earnings data. Look for companies whose earnings growth isstrong and consistent.

Click on legend items toshow peer companies andindustry averages in thechart (available in mostgraph displays).

Comparing the companyunder study with others inthe same industry helpsyou choose the strongestcompany.

Check that the graph lines are up, fairly straight and moving together in parallel(sometimes referred to as “railroad tracks”).

CORESSG QUICK START GUIDE (12/15) PAGE 4

Evaluate Management – Step 1 - % Pre-Tax Profit on Sales

Evaluate Management – Step 2 - % Earned on Equity

Check for a % pre-tax profit on sales (pre-tax profit margin) trend that isincreasing or at least stable over the last five years.

Check for a % earned on equity trend that is increasing or at least stable overthe last five years.

Pre-tax profit marginshould be as good or betterthan peers (competitors).

Look for companies withat least 15% earned onequity.

CORESSG QUICK START GUIDE (12/15) PAGE 5

Evaluate Management – Step 3, 4 – Debt, % Debt/Capital

Forecast Sales

Check for a % debt to capital trend that is decreasing or at least stable over thelast five years.

Enter the growth value inthe text box and clickUpdate Study.

Forecast the rate at which you believe sales will grow in the future taking intoaccount historical results, competition, market factors and analyst estimates.

Analyst estimates may beavailable for largercompanies as a referencefor your judgment.

Change the starting pointof your projection byselecting a radio button.

As a conservativeguideline, look for debtlevels to be less than 33%of capital.

Certain industries carrymore debt so compare thecompany under study topeers in the industry.

CORESSG QUICK START GUIDE (12/15) PAGE 6

Forecast Earnings

Assess Risk & Reward – Step 1 – Forecast High Price

Use extreme cautionbefore projecting EPS togrow faster than sales.

Forecast the rate at which you believe earnings will grow in the future taking intoaccount historical results, sales growth, market factors and analyst estimates.

Forecast the future average high P/E, considering the historical average andobserved trends. In general, set the future average high P/E to no more than 30.

Enter the growth value inthe text box and clickUpdate Study.

Analyst estimates may beavailable for largercompanies as a referencefor your judgment.

Enter the high P/E value inthe text box and clickUpdate Study.

Based on the forecasts -high EPS (in five years) andaverage high P/E - theforecast high price has nowbeen established.

CORESSG QUICK START GUIDE (12/15) PAGE 7

Assess Risk & Reward – Step 2 – Forecast Low Price

Assess Risk & Reward – Step 3,4 – Assess Stock PriceBased on the forecasted high and low prices the buy, hold and sell zones areestablished. Evaluate the current price in relation to the zones.

Forecast the future average low P/E, considering the historical average andobserved trends. In general, set the future average low P/E to no more than 15.

Low P/E x Low EPS Forecast is theoption utilized most often.- Enter the low P/E value in thetext box.- (optional) Adjust the Low EPSForecast to the Last 4 Qtr EPS andclick Update Study.

-OR-

Enter a value directly in the YourLow Stock Price Forecast text boxand click Update Study.

Review the Upside-Downsideratio in Step 4. It is desirablefor the upside potential (fromthe current price) to be at leastthree times larger than thedownside risk (3 to 1 or higher).

CORESSG QUICK START GUIDE (12/15) PAGE 8

Determine 5-Year Potential

Save, Send, Print & Research

Review the five-year potential return. This includes both the return from priceappreciation and from the projected dividend yield.

Click on the Research link to quickly linkto other free reference websites.

Use the top menu options to change studydata, save the study, email it to others,print a two-page PDF of the SSG or set yourpreferences.

(optional) Adjust theAverage Payout Forecast% based on historical data,observed trends and otherresearch.