Most bloggers and content article writers will write an entry discussing their research on a company for someone who knows nothing about the company and sometimes doesn't know anything about investing. That's a good way to approach things but not quite how I do it. See I'm selfish and a little lazy. I prefer my research to be in short notes and bullet type format vs formal paragraph style. Its intended more as a mental refresher for what I have already researched. If you are looking for a novel written on a company there are plenty of content writers who have you covered.
Now I'm happy to share that information with others as we all have different things we look at and combined we can get a better understanding of a company. It does however mean I should probably have an entry discussing what's in my reviews for others to reference back to.
Title and ticker symbol: I always have a ticker symbol so we are all on the same page. More and more companies have similar sounding names and tickers. e.g. Coca Cola (KO) vs Coca Cola Enterprises (CCE).
Last Updated: The quarter that I last researched the company. This is extremely important to keep track of so that we know how outdated the information is. Company plans, stats, risks, everything about them changes and our models get changed. The older the information is, the less impactful it is on our models.
Throughout the entire review I might have a date for a piece of data. I have found that on some conference calls a company will say something interesting that I want to record. Then they won't mention it for the next 2 quarters or more. That's 9 months and it may not be valid information anymore.
Description: Straight up description of the company and what they do.
How do they make money: How does the company make its profit. I list it because it may not always be apparent at first. Coca Cola for example does NOT make money from selling soda. They make money from selling concentrated flavored syrup to bottlers. The bottlers make and sell soda but they are different companies. Sometimes its no big deal but sometimes in can change our view of a company. REITs and BDCs are a great example of this as REITs do not just collect rent and BDCs do not just get loan payments.
Key Brands: What are the brands a company has to make money with. They aren't always the same as the company's name.
Company Organization: How does the company organize itself? Along geographic lines. Product line. Group of products or maybe some other way. I want to keep it listed because some company executives will be talking about an EPS for only one department vs the entire company. Others will talk about difficulties in a geographic region and I want to know what % of the overall company that impacts.
Plans and Strategies: What is the company working on and what are their goals they are trying to accomplish? I judge management on their own goals as anyone can slash their workforce and meet EPS estimates. Its an entirely different matter for management to state a goal and have to meet it. I also want to know what their thoughts are on how they are growing the company and therefore growing my dividend.
Risks: What are the risks that I can think of that will impact the company. This could include their product, brand name, competition, new technologies. I then want to look for ways the company is trying to mitigate these risks or if they even consider them a risk and talk about it.
Competitors: Which other companies are trying to steal this one's customer base. I also list the tickers here so I can keep an eye on them. You never know when you will need to sell a position but want to keep exposure to an industry.
Fastgraphs.com: Fastgraphs is a website that shows the historic fair price valuation, dividend, and price movements for a given equity. It does it in a way that you can look at it and quickly get an idea of a company. It has lots of options and choices for customization.
Company Stats: I list the last 9 years' and next year's estimated stats. EPS, EPS Growth, Share price, P/E and P/B. I then look at the 5 and 10 year averages. Its a quick way to see if something is under, at, or overvalued compared to its historic averages. I get these numbers off of Morningstar.com and Fastgraphs.com
Dividend Stats: Being a dividend investor, the dividend stats are going to be important. Yield, Growth rate, and EPS payout. Share buyback % is how many of the outstanding shares were purchased that year. Its a way management can give shareholders value and something I want to keep an eye on.
Earning Report Notes: Here I list the past 4 quarters of earning report conference calls. I have found them to be a wealth of information. First off you can see what the company was saying up to a year ago. What were their concerns and goals for the future and then we can see how that played out. We can look at trends of growth or decline in various stats. Also of importance is the question and answer section of concalls. Here the banks and institutional fund managers will ask questions. Its a good sign when they are giving congratulations to management for a great quarter and asking about the future. Its a bad sign when multiple people raise the same concern and management dodges the question.
Company and Industry specific commonly used acronyms and terms: Over the course of reviewing concalls, I've noticed a company will have its own language. It can be confusing when the CEO of Coca Cola is talking about price mix or the CEO of Aflac is talking about SMRs and you have no idea what those are let alone what is being said about it. Only rarely will they give a definition or even enough context to get a clue to what they are talking about.
Resources: Lastly I have links applicable to the company. Their main company website and their investor relations website. They won't always be similar. Morningstar has a wealth of number. I also list a link to any transcript page for further research of earning report concalls.
That should cover it. With earning season underway, I'll be updating and sharing my thoughts and ideas on various companies. I make no guarantee of accuracy nor that each one will have been reviewed every quarter or every future quarter.
EDIT: I added in Fastgraphs section.
Disclaimer: The investments and trades discussed are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.
Now I'm happy to share that information with others as we all have different things we look at and combined we can get a better understanding of a company. It does however mean I should probably have an entry discussing what's in my reviews for others to reference back to.
Title and ticker symbol: I always have a ticker symbol so we are all on the same page. More and more companies have similar sounding names and tickers. e.g. Coca Cola (KO) vs Coca Cola Enterprises (CCE).
Last Updated: The quarter that I last researched the company. This is extremely important to keep track of so that we know how outdated the information is. Company plans, stats, risks, everything about them changes and our models get changed. The older the information is, the less impactful it is on our models.
Throughout the entire review I might have a date for a piece of data. I have found that on some conference calls a company will say something interesting that I want to record. Then they won't mention it for the next 2 quarters or more. That's 9 months and it may not be valid information anymore.
Description: Straight up description of the company and what they do.
How do they make money: How does the company make its profit. I list it because it may not always be apparent at first. Coca Cola for example does NOT make money from selling soda. They make money from selling concentrated flavored syrup to bottlers. The bottlers make and sell soda but they are different companies. Sometimes its no big deal but sometimes in can change our view of a company. REITs and BDCs are a great example of this as REITs do not just collect rent and BDCs do not just get loan payments.
Key Brands: What are the brands a company has to make money with. They aren't always the same as the company's name.
Company Organization: How does the company organize itself? Along geographic lines. Product line. Group of products or maybe some other way. I want to keep it listed because some company executives will be talking about an EPS for only one department vs the entire company. Others will talk about difficulties in a geographic region and I want to know what % of the overall company that impacts.
Plans and Strategies: What is the company working on and what are their goals they are trying to accomplish? I judge management on their own goals as anyone can slash their workforce and meet EPS estimates. Its an entirely different matter for management to state a goal and have to meet it. I also want to know what their thoughts are on how they are growing the company and therefore growing my dividend.
Risks: What are the risks that I can think of that will impact the company. This could include their product, brand name, competition, new technologies. I then want to look for ways the company is trying to mitigate these risks or if they even consider them a risk and talk about it.
Competitors: Which other companies are trying to steal this one's customer base. I also list the tickers here so I can keep an eye on them. You never know when you will need to sell a position but want to keep exposure to an industry.
Fastgraphs.com: Fastgraphs is a website that shows the historic fair price valuation, dividend, and price movements for a given equity. It does it in a way that you can look at it and quickly get an idea of a company. It has lots of options and choices for customization.
Company Stats: I list the last 9 years' and next year's estimated stats. EPS, EPS Growth, Share price, P/E and P/B. I then look at the 5 and 10 year averages. Its a quick way to see if something is under, at, or overvalued compared to its historic averages. I get these numbers off of Morningstar.com and Fastgraphs.com
Dividend Stats: Being a dividend investor, the dividend stats are going to be important. Yield, Growth rate, and EPS payout. Share buyback % is how many of the outstanding shares were purchased that year. Its a way management can give shareholders value and something I want to keep an eye on.
Earning Report Notes: Here I list the past 4 quarters of earning report conference calls. I have found them to be a wealth of information. First off you can see what the company was saying up to a year ago. What were their concerns and goals for the future and then we can see how that played out. We can look at trends of growth or decline in various stats. Also of importance is the question and answer section of concalls. Here the banks and institutional fund managers will ask questions. Its a good sign when they are giving congratulations to management for a great quarter and asking about the future. Its a bad sign when multiple people raise the same concern and management dodges the question.
Company and Industry specific commonly used acronyms and terms: Over the course of reviewing concalls, I've noticed a company will have its own language. It can be confusing when the CEO of Coca Cola is talking about price mix or the CEO of Aflac is talking about SMRs and you have no idea what those are let alone what is being said about it. Only rarely will they give a definition or even enough context to get a clue to what they are talking about.
Resources: Lastly I have links applicable to the company. Their main company website and their investor relations website. They won't always be similar. Morningstar has a wealth of number. I also list a link to any transcript page for further research of earning report concalls.
That should cover it. With earning season underway, I'll be updating and sharing my thoughts and ideas on various companies. I make no guarantee of accuracy nor that each one will have been reviewed every quarter or every future quarter.
EDIT: I added in Fastgraphs section.
Disclaimer: The investments and trades discussed are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.
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