6 Easy Steps to Discounted Cash Flows for Beginners

13 minutes

 

discounted cash flow

In our search for the best way to evaluate a company, we look at intrinsic value formulas to help us determine a fair price for a company. Using a discounted cash flow evaluation is one of the ways we can do this.

Accounting scandals and manipulations of financial earnings have given a rise to the importance of analyzing free cash flows. These numbers are much more difficult to “fudge” and lead to a truer value of the company.

Use of this formula will also give you much greater insight into the company. You will get a better understanding of its growth in operating earnings, capital efficiency, the capital structure of the balance sheet, the cost of the equity and debt, and the expected length of the growth of the company.

Another advantage is this formula is less likely to manipulated by dishonest  accounting practices

We are going to take a look at this formula today and try to break it down and make it as easy to understand as we can. I am not going to lie to you there will be math involved but it is not difficult math.

In the business of finding the best intrinsic value for a company, we will be required from time to time to utilize math to find that intrinsic value.

So what is a discounted cash flow analysis?

According to Investopedia

“DCF analysis uses future free cash flow projections and discounts them (most often using the weighted average cost of capital) to arrive at a present value, which is then used to evaluate the potential for investment. If the value arrived at through DCF analysis is higher than the current cost of the investment, the opportunity may be a good one.”

What does all that mean?

Simply to estimate the money you would receive from an investment while adjusting the time value of money.

The reason you do this is the value of the dollar today is not what it will be worth in the future. It could be more or it could be less. So to try to adjust for that we use the discounted cash flow model or formula to help us find the closest intrinsic value we can find.

The discounted cash flow formula is powerful, but it can be flawed. Remember that it is just a mathematical tool to be used to find an intrinsic value.

You should never buy a company based on this value alone.

It is only as good as the information you put into it. As my music teacher used to say to me. “Garbage in, garbage out.” Small changes or errors in our calculations can have a huge impact on our value.This is why we don’t base a buying decision on just one formula. Important though it may be.

Last week we discussed the intrinsic value formula that was created by Benjamin Graham. This was a much easier, simpler way to calculate an intrinsic value of a company. The look at discounted cash flows will give us another tool in our effort to find the most accurate intrinsic value of a company we are looking to buy.

There are many different variations of formulas to arrive at an intrinsic value. The Ben Graham formula is one of them and today’s formula, the discounted cash flow is considered a variation of that effort as well.

These are the two most commonly used formulas, but there are others that we may discuss further down the road.

Ok, let’s start.

6 Steps to Find an Intrinsic Value of a Stock Utilizing a Discounted Cash Flow Formula

There are six steps along this path to find the intrinsic value of a company using the discounted cash flow formula. We will take a look at each one and break them down so you can follow along.

For this example, we are going to use a company that we analyzed last week so we can compare our results later.

Gamestop (GME)

The steps we will use will be as follows.

  1. Locate all the required financial data
  2. Calculate the discount rate and use it to discount the future value of the business
  3. Perform a discounted free cash flow (DCF) analysis
  4. Calculate the company’s net present value (NPV)
  5. Calculate the company’s terminal value (TV)
  6. Combine the net present value and the terminal value and come up with the company’s intrinsic value

Sounds simple huh? It is and you can do this. I will be here to help you along the way.

Step 1: Find all the necessary financial information

Before we dive into this we are going to need to locate all the necessary numbers to fill into our formulas as we go along. And then it’s just a matter of plugging them in.

For our calculations, there are 14 financial figures we are going to need to assemble before we can calculate our intrinsic value.

 

  • Current Share Price: Simple, find the current market price of the company
  • Shares Outstanding: Again, pretty simple. Find the total number of shares that are issued and currently held by the company’s shareholders.
  • Free Cash Flow: This number represents the company’s capacity for generating free cash flow, which can be used for future expansion, paying down debt, and increasing shareholder value with buybacks or dividends.
  • Long-term Growth Rate: the expected rate at which the company will grow
  • Business Tax Rate: the business income tax paid to the government.
  • Business Interest Rate: the effective rate that the company is charged for its loans and any borrowing.
  • Terminal Growth Rate: The rate that the company is expected to grow at after our cash flow projection period. We’ll use the country’s GDP growth rate as the Terminal Growth Rate
  • Market Value of Debt: the total dollar market value of a company’s short-term and long-term debt.
  • Market Value of Equity: otherwise known as the market cap. The total dollar market value of a company’s outstanding shares.
  • Stock Beta: Beta is a measure of how much the price of a company’s stock tends to fluctuate
  • Risk-Free Rate: the minimum rate of return that investors expect to earn from an investment without any risks. We’ll use a return of the 10-year Government Bond as a Risk-Free Rate.
  • Market Risk Premium: the rate of return over the Risk-Free Rate required by investors. For calculating the discount rate, you use the market risk premium data from NYU Stern School of Business.
  • Total Business Debt: total liabilities of the company
  • Total Business Cash: the total cash and cash equivalents of the company.

Step 2: Calculate the Discount Rate (WACC)

This is the most crucial part of our of discounted cash flow analysis. If this point is not done correctly it will throw off the future calculations and lead to an incorrect intrinsic value, which will lead to a possible purchase of an overvalued company. Leading to losses in your investments.

The key to this calculation is not assuming the same discount rate for every stock. You need to calculate the rate for each individual company or you could end up in a world of hurt.

Continue reading “6 Easy Steps to Discounted Cash Flows for Beginners”

Intrinsic Value Formula for Beginners

14 minutes

 

Stock Market

“The newer approach to security analysis attempts to value a common stock independently of its market price. If the value found is substantially above or below the current price, the analyst concludes that the issue should be bought or disposed of. This independent value has a variety of names, the most familiar of which is “intrinsic value”.

– Ben Graham, Security Analysis (1951 Edition)

Trying to determine the intrinsic value of a stock, car, home and iphone is an art form. There is no specific formula that can help you find the actual value of an item that does not have any error in it. There are many different formulas that can be used to determine the intrinsic value. But, unfortunately, there is no spreadsheet that you can plug numbers into that will give you that hard fast, rigid price.

Definition of Intrinsic Value

“A general definition of intrinsic value would be that value which is justified by the facts—e.g. assets, earnings, dividends, definite prospects. In the usual case, the most important single factor determining value is now held to be the indicated average future earning power. The intrinsic value would then be found by first estimating this earning power, and then multiplying that estimate by an appropriate ‘capitalization factor’”.

Ben Graham, Security Analysis

Or this from Joel Greenblatt,

“Value investing is figuring out what something is worth and paying a lot less for it.”

Finally this from Investopedia.

“The intrinsic value is the actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value. Additionally, intrinsic value is primarily used in options pricing to indicate the amount an option is in the money.”

All of these definitions say it pretty well. Intrinsic value is used for many things. It is mostly associated with buying stocks but it can be used for just about anything. Cars, homes, iphones, a loaf of bread. You get the idea.

Value investors use this theory and formulas to determine what the value of a company is. They use it to help find out what price they need to pay to achieve a margin of safety.

Notice that I haven’t mentioned price much? This is because intrinsic value focuses on what a company is worth, not how much it is trading for on the stock market. Price does not equal value.

“Price is what you pay, value is what you get.”

Warren Buffett

This is the first line in the value investing manual. Well, maybe not. But it should be. Price is a function of the vagaries of the stock market. Mr. Market has a field day with the price.

Value is something much more valuable than the price you pay for something. Can you put a price on your home? No, but you can put a value on it.

In the stock market world finding the intrinsic value is of utmost importance. This gives us the ability to determine a margin of safety. Which is critical to determining whether or not this is a company we want to invest in.

Why does intrinsic value matter?

In a broad sense using an intrinsic value formula to calculate that value gives you the opportunity to decide whether or not to buy or sell a company.

Continue reading “Intrinsic Value Formula for Beginners”

Patience Leads to Success When Examining Investing Opportunities

9 minutes

Baseball

“Baseball is the only field of endeavor where a man can succeed three times out of ten and be considered a good performer.”

Ted Williams

My favorite sport in the whole world is baseball. I love everything about it. The history, strategy, pace of play, intricacies, stats, and the grace of the game.

It can be breathtaking and heartbreaking, sometimes in the same play. There is nothing like watching a playoff game with the game on the line and both team’s best pitcher and hitter competing against each other.

To stand in the batter’s box and face a man that can throw over a 100 mph takes courage and an incredible amount of skill. This is not a skill that everyone has, to hit a round ball with a round bat and to do it successfully.

Michael Jordan was considered the finest athlete of my generation and he couldn’t hit a baseball. It is considered by some to be the hardest act there is in sports.

Consider this, to be a successful hitter in baseball means that you only succeed three out of ten times. In any other profession, you would be fired so fast with a performance like that. Imagine a computer repairman only fixing three out of ten computers.

Out of business.

Ted Williams, is considered arguably the greatest hitter in the history of the game. He played from 1939 to 1960 with the Boston Red Sox. His career average of .344 and 521 are some of the best in the history of the game. At the age of 39, he hit .388 which won him the league batting title that year. Which made him the oldest player to ever win a batting title.

In his final at-bat of his career, he hit a home run. Very fitting for a player of his caliber.

Simply put, the man could hit.

So what does this have to do with investing? Well, let’s take a look.

Ted Williams and the Science of Hitting

After his playing days, Williams still was a major influence on the baseball world. He did manager for a short time and did some consulting for the Red Sox.

But his greatest contribution was his study of hitting. During his career, he was a great student of hitting and was always reviewing what the pitchers were doing and using this information to analyze his approach to become better.

He said that most players during his time didn’t pay much attention to what the pitchers were throwing and how they did against those pitches. Bobby Doerr, who was a career .280 hitter would often come back to the bench without any idea what pitch was thrown, even if he hit a homerun.

In his seminal book “The Science of Hitting” he described his discipline with his approach of creating 77 cells in the strike zone, each the size of a baseball. Swinging only at balls in his best zone would allow him to hit .400. Reaching for balls in his worst zones, for example, the low and outside corner zone of the strike zone would reduce him to a .230 hitter.

He found that if he waited for his pitch in a zone that he could handle then he was going to be very successful and if he swung indiscriminately at any pitch in any zone he was likely to very unsuccessful.

I would say that his philosophy worked out for him pretty well. He combined power, patience, and skill into a combination that has not been seen since his time in the league. Continue reading “Patience Leads to Success When Examining Investing Opportunities”

Who is Mr Market and why do we care?

9 minutes

 

Mr. Market

The stock market goes up and down every day. If you watch one of your stocks on a daily basis you could see it rise and fall even on the same day. It can be kind of maddening and extremely frustrating.

One of the questions that investors ask is why does the market behave this way? Frankly, there is no easy answer and there are lots of speculations about the real reason.

Stock prices can change daily as a result of market forces. This means that the prices rises and falls due to supply and demand. If more people want to buy or demand than sell it or supply. Then the price goes up. On the flip side if more people want to sell the stock than buying, then there would be a great supply than demand and the price would fall.

Now if only it were that easy, let me assure you it is not.

Who is Mr. Market?

Mr. Market is a creation of Benjamin Graham that he used to explain the vagaries of the stock market.

Benjamin Graham is considered the father of value investing and was a huge influence on Warren Buffett. In 1949 Graham wrote a hugely influential book titled “The Intelligent Investor”. This book is considered by most to be the biggest influence on investing out there.

In this seminal work, he included his character, Mr. Market.

So what does Mr. Market do?

Every day he shows up at your door offering to buy and sell his shares at a different price. Sometimes, the price quoted by Mr. Market seems reasonable, but most times it is ridiculous. The investor is free to agree with the quoted price and do a trade with him. Or to ignore him completely. Mr. Market doesn’t mind either way and tomorrow he will be back to quote another price.

Sounds simple, huh.

Let’s look at an excerpt from The Intelligent Investor, Revised Edition 2005, pages 204-5.

“Imagine that in some private business you own a share that costs you $1,000. One of your partner’s, named Mr. Market, is very obliging indeed. Every day he tells you what he thinks your interest is worth and furthermore offers either to buy you out or sell you an additional interest on that basis. Sometimes his idea of value seems plausible and justified by business developments and prospects as you know them. Often, on the other hand, Mr. Market lets his enthusiasm or his fears run away with him, and the value he proposes seems to you a little short of silly.

“If you are a prudent investor or sensible businessman, will you let Mr. Market’s daily communication determine your view of the value of a $1,000 interest in the enterprise? Only in case you agree with him, or in case you want to trade with him. You may be happy to sell out to him when he quotes you a ridiculously high price, and equally happy to buy from him when his price is low. But the rest of the time you would be wiser to form your own ideas of the value of your holdings, based on full reports from the company about its operations and financial position. Continue reading “Who is Mr Market and why do we care?”

Interest Rates: How They can Help Us or Hurt Us

15 minutes

 

Today’s interest rates are currently the lowest in human history. There are some countries in the world that are offering negative interest rates which means that you have to pay your bank to keep your money in their accounts.

There has been a lot of talk in the news about interest rates and how they affect us. With the rates being so low and all the talk about how they are going to start raising them, I thought this would be a good time to discuss why this is big deal and how it affects our investments.

How did we get here, to begin with? Well in 2008 when everything went sideways in the markets, economy and real estate the Fed needed to do something to try to stop the bleeding. One of their actions was to lower the interest rates. They ended up lowering them to 0.25% which was the lowest in US history. Originally they had set the benchmark level to be a 1% but they felt that the only way to get ahold of this was to lower the rates to this unprecedented level.

The rates have remained at this level until recently they have begun to raise them slightly. Last year in December 2015 they raised the rates 25 basis points or 0.25% and this December 2016 they raised them another 25 basis points.

What is the Federal Reserve?

The Fed was established in 1913 and up to this time the US was a considerably more unstable place financially. Panics, seasonal cash crunches and a high rate of bank failures made the US economy a poor place for international and domestic investors to place their money.

It was J.P. Morgan who forced the government into acting on its decade’s long plans of creating a central bank. During the Bank Panic of 1907, Wall Street turned to J.P. Morgan to steer the country through the crisis that was threatening to push the economy over the edge and into a full crash and depression.

Morgan was able to convene with all the principal players at his mansion and command that all their capital flood the system, thus floating the banks, that in turn helped float the businesses until the panic passed.

The fact that the government had to rely on a private banker for its economic survival forced it to pass the necessary legislation to create a central bank and the Federal Reserve.

The Federal Reserve was given control over the money supply and, by extension the economy. During the crash of 1929 and the start of the Great Depression the Fed stood by and did little to nothing to prevent or soften the blow that followed during those years. This has been hotly debated in the years following about what impact they could have had but the fact that they did nothing was definitely a factor in the length and depth of the Great Depression.

During the crash of 1987 Alan Greenspan gathered all the leaders together echoing J.P. Morgan and during his meeting, he dictated that the major players flood the markets to keep the banks afloat. He also instituted lowering the interest rates as a weapon to control the economy. This was the first time it was done and it set a precedent.

The Fed uses the control of the interest rates to make corporate credit easy to get, thus encouraging business to expand and create jobs. Unfortunately, this can also cause inflation to rise. To control this they lower interest rates which cause the economy to slow and can cause unemployment. So it is a double-edged sword.

Continue reading “Interest Rates: How They can Help Us or Hurt Us”

Value Investing: The Art of Buying Undervalued Companies

11 minutes

 

“Price is what you pay, value is what you get.”

Warren Buffett

In this simple saying, Warren Buffett, arguably the greatest investor of our generation has summed up what value investing is. It is the search for companies that are selling below their intrinsic value, with the hope that we can buy them at a discount and that their price will rise over time.

Value investing, unlike some other investing strategies is fairly simple. It doesn’t require that you have an extensive background in finance. Certainly, understanding the basics of finance will help, but you don’t need to go to Harvard to follow this strategy.

It also doesn’t require an expensive subscription to terminals to help you find companies or how to read very extensive charts. There is also little need for math, but some is required.

The main ingredients needed are patience, common sense, money to invest and the willingness to do some reading and accounting then you have what it takes to become a value investor.

Five Fundamental Concepts of Value Investing

Value Investing Fundamental No. 1 – All companies have intrinsic value. This is what gets most people about value investing. The basic concept is so simple that you probably do it on a daily basis already. The idea is that if you already know the true value of something then you will save a ton of money by buying it when it is on sale.

Let’s use an example to illustrate. Most people would agree that whether you buy a new cell phone when it’s on sale or when it’s at full price, you’re getting the same cell phone with the same screen size and same memory. The obvious assumption that we have to make is that the value of the cell phone will not depreciate with time as new technology becomes available.  

Stocks are the same way, the company’s stock price can change even though it’s intrinsic value has stayed the same. Stocks, like cell phones, go through periods of higher or lower demand. These fluctuations change the price but they don’t change what you are getting.

Most savvy shoppers would say that it is crazy to buy a cell phone at full price when you can buy them on sale many times throughout the year, particularly during the holidays. Stocks work the same way. The only difference is that unlike cell phones, there is no predictable time of the year that stocks will go on sale, such as a Black Friday event. Which is unfortunate. Also, their prices won’t be advertised in a daily mailing like Target. Also unfortunate.

If they did know about the sale price it would create more demand and drive up the price, which means they wouldn’t be a bargain for us to take advantage of.

The trick with value investing, if you are willing to do a little sleuthing work to find these secret sales, you can get stocks at a discount that other investors would be oblivious to.

Continue reading “Value Investing: The Art of Buying Undervalued Companies”

Superinvestors of Graham and Doddsville: What We Learned

13 minutes


picture courtesy of ruleoneinvesting.com

“While they differ greatly in style, these investors are, mentally, always buying the business, not the stock. A few of them sometimes buy whole businesses, far more often they simply buy small pieces of the business.”  

        Warren Buffett, Superinvestors of Graham and Doddsville

In May 1984, Buffett laid out his thoughts on everything you need to know about his investing philosophy.

In a speech at Columbia Business School, which was later adapted into an essay. Buffett introduced what he termed “The Superinvestors of Graham and Doddsville.”

The “Superinvestors of Graham and Doddsville” is a name that Buffett gave to Benjamin Graham and a group of his proteges. The group of money managers once studied under or worked for Graham, Buffett or Munger, Buffett’s partner at Berkshire Hathaway. We will talk about each of them more in depth coming up.

The speech was given in honor of the 50th anniversary of “Security Analysis” which was written by Benjamin Graham and David Dodd. The book was published in 1934 and was the seminal book on analysis business using financial fundamentals that were outlined by Graham and Dodd.

Warren Buffett is arguably the world’s great investor, there have been many books, essays, and papers written on his greatness. I am not smart enough or eloquent enough to improve on them but I will touch on his beginnings for a moment.

Although Buffett’s father was a stock broker he didn’t have his a-ha moment until he read another very famous Graham book “The Intelligent Investor”. It caused Buffett to apply to the Columbia School of Business to study with Graham. To this day, Buffett credits that book with changing his professional life and Warren believes that most of what everybody needs to know about investing come from two chapters in the book.

The chapter on Mr. Market, which outlines behavioral finance concepts before the term even existed. And the chapter on Margin of Safety.

Breakdown of the speech

At the start of the speech he asks the question “is the Graham and Dodd look for values with a significant margin of safety relative to prices approach to security analysis out of date?”

He then touches on the theory of Efficient Market Hypothesis, which states that the market is efficient in how it prices each and every stock in the market. Meaning that the market is taking into account everything that is known about the company’s prospects and the state of the economy in the price of each stock.

The hypothesis states there are no undervalued stocks because there are smart security analysts who utilize all available information to ensure unfailingly accurate pricing.  

He thinks that this is bunk!

Continue reading “Superinvestors of Graham and Doddsville: What We Learned”

403b: 9 Benefits that Can Help Your Retirement Savings Grow

9 minutes

photo courtesy of borderlessreviewsandnews.com

What is a 403b?

A 403b plan is a retirement plan for certain public school individuals, employees of tax-exempt organizations, and ministers. Individual 403b accounts are set up by employees and managed by eligible employees.

While not as prominent as the better-known 401k, the 403b retirement framework is often used by schools systems, churches, hospitals and may other types of organizations.

The structure of the 403b is as follows.

An individual account within the 403b typically takes the form of a Tax Sheltered Annuity. This is an annuity contract offered by an insurance company. In exchange for a premium, which can be paid in a lump sum or a series of payments. The insurance company agrees to make fixed or variable payments beginning at a future date. This can be either for a specific term or for the rest of your life.

Like a pension, your contributions and your contract’s earnings from investments can consider building up your retirement income stream.

A 403b can also be structured as a custodial account that can invest in mutual funds.

Some 403b plans which are specific to churches can take the form of an account that invests in either mutual funds or annuity contracts.

You can’t contribute directly to your 403b plan. What they do instead is per your salary-reduction agreement they withhold a predetermined amount from your paycheck. This is known as an “elective deferral”. These elective deferrals are exempt from income tax, although you are still responsible for Medicare and Social Security tax on these contributions.

Plan earnings are also exempt from income tax until the participant withdraws them. This is one of the big benefits of the 403b plan and the tax-deferred annuity structure.

One thing to keep in mind is that some plans don’t allow for after-tax elective deferrals. In these cases, the deferral amounts aren’t deductible on your tax returns. Of course.

On top of elective deferrals, your employer can contribute directly to your plan via “non-elective contributions”. Current regulations allow your account to be funded through a combination of elective deferrals and employer contributions.

So how much can I contribute to my 403b?

Continue reading “403b: 9 Benefits that Can Help Your Retirement Savings Grow”

3 Different Types of Annuities and How They Can Be of Benefit

12 minutes

 

Photo courtesy of clay marketing

Did you know that Charles Dickens refers to annuities in his novels often because they were the favored investment of the upper class in 18th century Europe?

Or did you know that Babe Ruth didn’t lose his money during the Great Depression because his money was safely invested in annuities?

One last one for you. Did you know that Wheel of Fortune often gives away annuities as prizes?

Annuities are a product that most of us have heard of, but what do we really know about them? What are they really? How do they work and when should I use them?

These are some of the questions we will answer as well as looking at the different types of annuities, and there are many.

What are Annuities?

Annuities were invented by Babylonian landlords in approximately 1700 BC. They used the income from a certain piece of farmland to provide lifetime rewards for soldiers loyal assistants.

In more recent times, annuities were first offered to the American public in 1912 by the Pennsylvania Company for Insurance on Lives and Granting Annuities.

According to Investopedia, an “annuity is a contractual financial product sold by financial institutions that are designed to accept and grow funds from an individual and then, upon annualization, pay out a stream of payments to the individual at a later point in time. The period of time when an annuity is being funded and before payments begin is referred to as the accumulation phase. Once payments begin, the contract is the annuitization phase.”

Annuities were designed to be a reliable source of steady cash flows for an individual in their retirement years. Or alleviate risk or the fear of outliving your money. A very real fear.

Annuities can also be created to turn a large lump sum of cash into a steady cash flow. This is great for winners of large sums of cash such as lottery winners or a winning a lawsuit.

Defined benefit pensions or Social Security are two examples of lifetime guaranteed annuities that pay retirees a steady cash flow until they pass.

You remember those J.G. Wentworth commercials? Well, those are the perfect example of a lifetime guaranteed annuity. You give them your lump sum of cash and they give you a lifetime cash flow for that exchange.

How do Annuities Work?

An annuity is a cross between an insurance product and an investment product. They come in many different shapes and sizes, but the basic theme is that you give your money to a financial institution, like an insurance company and they promise you a certain rate of return, usually for the rest of your life.

The annuity will make payments to you on either a future date or series of dates determined by you. The income you receive from an annuity can be paid out monthly, annually, or even a lump sum payment. Continue reading “3 Different Types of Annuities and How They Can Be of Benefit”

Tools That I Use to Be a Better Investor

6 minutes

 

Photo courtesy of engineerblogs.org

This is a list of the different tools that I use to help me find the stocks that I investigate, track, and purchase. It is an ongoing list and I discover new tools all the time. Please check back from time to time to see what may have changed. I will update as I discover new things. This is the fun part as we discover more ways to learn about stocks and how to invest. It is never over, the learning. 

Stock Screeners:

FINVIZ

This is hands down my favorite screener. It is super easy to use and has great information on all sorts of financial data. It is sortable by rows and you can edit out the data you don’t want. It does have a premium edition that enables you to export your picks into an excel spreadsheet.

One of the things I like about this particular screener is that you can sort by all the financial data I am looking for to weed out the stocks I won’t be interested in. For the value investing metrics that I look for it gives me great flexibility to edit those metrics out to help narrow down the choices.

It also has links to different news sources relating to the particular company you are investigating. Another perk of this site is that if you are looking for in-depth info on a company and need the data quickly it is easy to search for that data on their site.

One last perk, it is free!

GOOGLE FINANCE

This is another great screener that I will use to get additional ideas. I came across this website in general thru Preston & Stig from The Investors Podcast. They use this site for their stock screener. They send out a checklist for signing up for their newsletters that have some great ratios for you to screen for.

One of the things that I like about the Google screener is not only the ability to screen for stocks but also the ability to check on all the news in the financial world.

An additional plus is you can download the app as well so you can access all of these features from your smartphone as well.

Also free.

FINANCIAL DATA:

Morningstar

This is one of the best sites to gather financial data on any company that you are interested in. It has ten years of data, which can be difficult to find on many sites.

Continue reading “Tools That I Use to Be a Better Investor”