Tools of the trade
It’d be difficult to play a round of golf without your clubs or nine innings of baseball without your glove. These items are necessary tools that allow you to perform well when it’s go-time. Investing is no different. If you’re interested in selecting individual stocks, you need to know what tools are required and to ensure you know how to use them properly.
When it comes to finding and analyzing a stock, here are the top 3 resources I use to help build an investment thesis:
- Fidelity Stock Screener – to find quality stocks
- Quickfs – to review historical financial and operating data on the company
- Investor Relations website – to hear straight from the horses mouth
Fidelity stock screener
A stock screener is an incredibly valuable tool that helps investors narrow in on stocks meeting specific criteria. If you want to screen for stocks with 50% annual revenue growth, you can. If you want to screen for stocks with P/E ratios less than 50, go for it. If you want to screen for both, no problem. The possibilities are almost endless. Check out this post to see why Fidelity is my favorite stock screener and to learn how I use it to screen for high quality growth stocks.
The stock screener you select isn’t all that important. There are numerous options available, both free and paid, and just about any of them will get the job done (a couple free options are Yahoo Finance and finviz). What’s important is that you use one. Doing so will allow you to narrow down your search from 9,000 stocks to less than 20 within a matter of minutes. Be sure to take advantage.
Quickfs for historical financial data
After finding a stock using a stock screener, Quickfs is usually where I go next. Quickfs is an incredible tool that allows you to quickly review a company’s past 10 years financial and operating history. You can review annual data for free, but a paid subscription is required for quarterly data, to export data, etc… A subscription costs $29 per month when billed annually or $35 per month when billed month-to-month. Personally, I use the free version because, as a long-term investor, I’m interested in years, not quarters.
For each stock, Quickfs displays five separate pages with 10 years worth of data:
- Overview
- Income Statement
- Balance Sheet
- Cash Flow Statement
- Key Ratios
Quickfs allows me to quickly review the financials and balance sheet of a company to determine if I want to spend any more time on its stock. It’s extremely useful and I strongly suggest you add it to your toolbox.
Investor Relations website
If the stock I’m reviewing looks good on Quickfs, my next visit is the company’s Investor Relations website. Nearly all publicly traded companies have an Investor Relations website where you can find investor presentations, press releases, financials, SEC filings, and other information. Many times, it’s a treasure trove of valuable information and insights. Here’s a link to Apple’s as an example.
If you read a company’s investor presentation, quarterly (10Q) or annual (10K) filings, or listen to one of their quarterly conference calls, you’ll have done more than about 95% of investors (and that’s probably an understatement).
Prior to investing in a stock, be sure to read up on the company using its IR website and use the information to your advantage.
