Below is a ranked list of the tools we use almost every day as we try to find and research undervalued stocks.
SA deserves enormous credit for building a smooth-working platform where investment ideas can be exchanged. Even though at least 95% of the articles are of little interest to a value investor, the site has many features that make the site a “must use.”
One very important function is the portfolio feature. This allows us to enter a long list of possible stock ideas, our watch list, and we then receive an e-mail alert when a story is written about any of these stocks.
SA also provides a great summary of the performance and ratios for stocks on our watch list. SA’s morning summary of “Must-know news” is clear and well written. The archive of research reports is key source of information when looking at individual stocks.
2. Value Line
Since the first days of our investment careers more than 30 years ago, the Value Line has been a constant companion. The best habit that any value investor can develop is to take a brief glance at the 70 or so stocks reviewed in the new weekly edition. If you really want to find your own ideas, there is no better source.
We strongly urge you to get to know just a little bit about the 1700+ companies reported on by Value Line each quarter. Of course, as value investors we ignore their rating system. In fact over the years we have noticed that many of our best ideas receive the lowest rating a “5” from Value Line. Each week they also publish a useful set of screens, especially the low price to book screen.
This website is a recent edition to our toolbox. As we started this project we did a careful review of all the resources available on the Internet. Of all the new sites we examined as practical tools to help value investors, none was better than Gurufocus.com.
We especially like their coverage of less well-known gurus. For example, Don Smith who concentrates on the lowest decile price/book stocks. The site has many interesting articles. The Ben Graham video is priceless. We are just beginning to learn to use their screening package. Getting new ideas from other value investors is a key source of new ideas. Gurufocus.com is the best site for this endeavor.
4. Google Finance and Yahoo Finance
We use these sites interchangeably. Each has its strengths and weaknesses. Together they are a great source of management bios, Wall Street buy/hold/sell ratings, large holders, and other miscellaneous information. Either is a great way to give a company a quick scan before you begin to dig further.
We use this Thomson Reuters site for quick access to earnings calls and, even more importantly, to find conference presentations. A concise conference presentation usually gives an investor at least as much information as a well written Wall Street report.
This is a tool that we are just beginning to use. The basic research reports provide a decent level of insight. We especially like the quick “what the bulls and bears are saying” section. The portfolio stats available for mutual funds are also helpful. While we have always been troubled by Morningstar’s mutual fund rating methodology, we will try to look at the information provided here with and unbiased eye.
This is a good site for screening and for quick overviews of all stocks in an industry using various mertics.