Did you hear about FAANG stocks and wonder what they are? No, its not about investing in vampires, although that would be cool. Investing in FAANG stocks means taking a bite – sorry couldnt resist – out of some of the very best companies on the market.
What are FAANG Stocks?
The acronym FAANG represents five of the leading American technology stocks on the market:
- Facebook (Nasdaq: FB)
- Amazon (Nasdaq: AMZN)
- Apple (Nasdaq: AAPL)
- Netflix (Nasdaq: NFLX)
- Google (Nasdaq: GOOG)
In other words, the creme de la creme of social media, e-commerce, computer and phone hardware, streaming media, and internet search. These are all core areas of the modern technology sector.
Origin of the Name “FAANG”
The moniker “FANG” was originally coined by the famous Jim Cramer of the CNBC show Mad Money. He coined the term back in 2013 saying that these firms are, totally dominant in their markets.
Originally the term excluded Apple but was amended to include it in 2017. Thats when the acronym changed from FANG to FAANG stocks.
There have been other variations of the term proposed throughout the years since Cramers coinage. Here are some examples of these:
- June of 2017: the investment banking powerhouse Goldman Sachs proposed the acronym FAAMG to represent Facebook, Amazon, Apple, Microsoft, and Google.
- October of 2017: financial giant Bank of America suggested that chipmaker Broadcom and digital media and marketing software firm Adobe should be included in the acronym to create FAAANG stocks.
- July of 2018: publishing institution the Financial Times proposed MAGA – Microsoft, Apple, Google, Amazon – as a play on the success of the Trump economy.
- August of 2018: Jim Cramer suggested that FAANG be changed to WANG – to include Walmart, Apple, Netflix, and Google.
Im rather glad that people did not change FANG stocks to WANG stocks. Though I can see the merits of including Walmart. Walmarts e-commerce business has been transformed to be a true competitor of Amazon, after all.
Advantages and Disadvantages of Investing in FAANG Stocks
It’s not only the case that FAANG stocks companies are insanely famous and popular. It’s also that they are some of the largest in the entire world. They have a combined market cap of over $4.1 trillion dollars as of this month.
Compare that with the overall U.S. stock market which is worth about $34 trillion. Thats about 10% of the overall market.
Four of the FAANG stocks are included in the top 10 of the S&P 500.
One advantage of investing in these is that you get to play on some of the other most innovative technologies on the market. For example, Google is a major player in artificial intelligence and self-driving cars. And Amazon and Apple are both major players in the internet of things.
Other important tech trends that you can play on with these stocks include streaming media, the cloud, and smart homes technology.
There are also disadvantages that could harm FAANG stocks in the future. For example, they tend to have exposure to the regulatory scrutiny.
For example, the government has been investigating whether Google has been engaged in anti-competitive business practices. And companies like Google and Facebook have also been criticized for data privacy and security concerns.
Plus, Netflix is facing increased competition in the streaming media landscape. For example, even Apple has been getting in on streaming media. And other companies like Hulu and Disney have been making major inroads.
Some analysts also suggest that FAANG stocks are currently a bubble. Therefore, they are way overpriced. Could this be the case or is the overall performance of these stocks justified?
Its easy to come to the conclusion that their incredible financial performances have justified the stock prices, though. Take a look at their stock gains over the past ten years:
- FB: 537%
- Amazon: 1,197%
- Apple: 752%
- Netflix: 3,257%
- Alphabet (Google): 332%
FAANG stocks have been outperforming the broader stock market over the past few months. Some of this is due to the reaching of a first-phase trade deal between the US and China.
Components of the FAANG Stocks Group
Let’s take a look at each individual component of the FAANG stocks group:
Facebook is worlds largest social media network with 2.5 billion users. Plus, the social media stock has expanded beyond its core platform into products like the chat app WhatsApp, the image sharing social media tool Instagram, and Oculus VR virtual reality gear. So it’s a true social media powerhouse.
Over the past year the timeline titan has grown its share price from $145.70 to to around $210 for a return of approximately 44%. It’s done so by posting strong year-over-year revenue growth for each quarter since December of 2018, upwards of 25%.
On the other hand, Facebook tumbled this week a bit on its quarterly earnings report. Despite bringing in $21.08 billion in additional revenue yielding an earnings per share of $2.56, net income only increased 7% year-over-year. As a result of increased expenses growing to $12.2 billion, the share price dropped about 15 points from yesterday’s close of $223.23.
Amazon is a business-to-consumer (B2C) e-commerce juggernaut with over 120 million products for sale. It has over 150 million active US customers. More than half of these, including this present author, pay for monthly Amazon Prime memberships.
As a book nerd, I truly appreciate Amazons humble beginnings as an online bookseller. Not only is Amazon now THE player in e-commerce, it also is a major leader in cloud computing solutions. And Amazon Web Services has been a major driver of the companys growth.
Amazon also offers online streaming media including movies and music (although I tease my friends who use Amazon over Spotify for music mercilessly) as well as consumer electronics devices like the Kindle and the Echo.
Over the past year Amazons share price has grown by about 17%. It is currently trading around $1,860.
Some have argued (including me) that Apple isnt the innovative hub that it once was under co-founder and former CEO Steve Jobs. Nevertheless, its still FAANG-worthy as the purveyor of everything from iPhones to iPads and iPods (I still use the latter). It’s also in the businesses of streaming music, smartwatches, streaming television and more.
Depsite my pessimism about Apple’s innovative future, I can’t deny that its stock price has been anything but electric over the past year. It climbed from a 52-week low of $160.23 by about 112% to around $325. The company is flush with cash and still in a strong position to continue its growth moving forward.
Netflix has a smaller market cap than the rest of these at only around $150 billion. But its still a super Wall Street stock due to its incredible subscriber growth rate as well as its overall industry disruption.
The company currently has over 150 million subscribers. And the price those subscribers pay for streaming is currently between $8.99 and $15.99 per month.
Costs associated with producing original content are something to watch. But cmon, who wouldnt shell out a lot of money to produce Henry Cavill as The Witcher?
However, over the past year Netflixs share price has only grown by about 37%. This is great but not as spectacular as Apple, for example.
Netflix is currently trading around $340.
Google is the worlds most popular search engine. It happens to own the second most popular one as well, which is YouTubes search engine. But it’s so much more than just search engines.
Google is smart cities, biotech, self-driving cars, artificial intelligence, and more.
Over the past year Googles share price has grown by about 55%. It is currently trading around $1,440. Watch for Google’s earnings report on February 3rd after market close to see if the search engine superstar keeps up its performance.
How to Invest in FAANG Stocks
Its easy! All you need to do is use an online brokerage account like E-Trade or Robinhood and buy shares of whichever FAANG(s) you want. However, its worth noting that these arent cheap stocks.
Mutual funds or ETFs could be another way to go.Here are some FAANG heavy ETFs you may want to watch:
- Invesco QQQ QQQ (Nasdaq: QQQ): 30.3% share in FAANGs
- iShares Russell 1000 Growth ETF IWF (NYSEARCA: IWF): 20.7% share
- iShares North American Tech ETF IGN (NYSEARCA: IGN): 37.3% share
- iShares Evolved U.S. Technology ETF IETC (BATS: IETC): 27.7% share
Whether you invest directly in FAANG stocks or purchas shares of a heavily weighted ETF, these are stocks you’ll want to watch all year round. There’s no sure thing in the stock market, but you can bet that these companies will continue to be heavy hitters for a long time to come due to their overwhelming market dominance.
To keep up with the latest info on FAANG stocks like Amazon, Apple and Google make sure to subscribe to the Investment U daily eletter by entering your email address in the field below. Happy investing!
By: Brian M. Reiser
Title: Why FAANG Stocks Are an Investing Powerhouse
Sourced From: investmentu.com/faang-stocks/
Published Date: Fri, 31 Jan 2020 11:02:05 +0000
What is the Difference Between ETFs and Index Funds?
ETFs and index funds attempt to mimic the growth of the stock market. The general trend of the stock market in its few hundred years of existence has been upward, even if it has its daily ups and downs. So, the goal of a diversified portfolio, like those available in both ETFs and index funds, is to tap into that growth for individual consumers. Usually, these assets are geared toward slow and steady, long-term growth.
Before you start looking for your next investment opportunity, it’s smart to become more familiar with the different kinds of financial products available. This post will cover what you need to know about the difference between ETFs, or exchange-traded funds, and index funds. The two investment tools are fairly similar, share many of the same perks, and are often suitable for similar long-term investing goals. However, they do differ in a few interesting ways. Some of the topics we’ll cover related to ETFs vs index funds include:
- Understanding ETFs
- Index fund basics
- Index funds vs ETFs: What’s the difference?
- How do I know what’s right for me?
- ETF and index fund essentials: How to get started investing
Before you call your broker, let’s cover the basics.
An ETF stands for exchange-traded fund. There’s a lot going on in that term, so let’s break it down. “Exchange-traded” means it’s traded on a stock exchange, the same way that investors might trade shares in an individual company. “Fund” simply means it’s a large collection of money that many people can add to. Put the two together, and you get a fund where investors can pool their money into a collection of stocks and bonds.
ETFs come in two broad categories that are important to know about before investing any capital: index ETFs and actively managed ETFs.
- Indexed ETFs track a market index, like the Dow Jones or S&P 500. These are collections of large companies whose overall trajectory closely mirrors the progress of the market as a whole. Over history, the general trend of the economy has been upward. So, the idea behind an index-based ETF is to simply tap into that growth by putting the pooled funds into a collection of stocks that will track market trends.
- Actively managed ETFs are managed by a fund manager who intentionally invests in certain securities in order to reach a specific investment goal. The idea behind an actively managed fund is that the investors, and the fund manager, are hoping to grow high-yielding assets faster than they might by simply matching a market index.
For the sake of this post, we are mostly concerned with the difference between index funds and ETFs, so we’ll focus more on index-based ETFs because they are much more common than their actively managed counterparts.
Index fund basics
Index funds are a general name for a fund that seeks to track a market index. So, technically speaking, an indexed ETF is a type of index fund. Index funds, however, can also be mutual funds, which are another investment product that you can purchase.
A mutual fund is a company that bundles investors’ money and puts it toward a set of securities and bonds with a particular investment goal in mind. Index mutual funds try to track a market index, and so they tend to grow with the economy over time. Other mutual funds may try to out-perform the market, or try to cash in on a new and exciting innovation that presents an investment opportunity.
Index funds, however, tend to be the “slow and steady wins the race” option. In fact, 80% of actively managed funds (funds that are attempting to out-perform the market) did worse over time than the S&P 500. This means that, if you had invested in an index fund tracking the S&P 500 instead, you would likely have made more money than someone who invested in an actively managed fund.
If it sounds a lot like an index-tracking ETF and an index-tracking mutual fund are pretty similar, don’t worry; that’s because they are. However. there are still a few important differences to point out, which we will go over next.
Index funds vs ETFs: What’s the difference?
The difference between an index-based ETF and an index-based mutual fund is pretty technical, but understanding investing often requires working through technical terms. First, in a certain sense, simply comparing ETFs vs index funds is a bit of a false dichotomy. That’s because ETFs can be index funds, as long as they’re structured to track an index.
In a broad sense, the two vehicles are geared toward the same purpose, too: earning you money slowly but (mostly) surely over the long term (years to decades). You’re likely to find both ETFs and indexed mutual funds included as part of retirement portfolios.
Both ETFs and mutual funds (indexed or not) are SEC-registered investment companies. ETFs, however, trade just like stocks meaning that you can buy or sell shares at any time the market is open. Mutual funds, on the other hand, can not be traded during the day. Mutual Funds are priced at the end of each trading day, so if you placed a buy trade for a mutual fund on Monday the shares would not be purchased until Tuesday. This main difference is because ETFs, like stocks, can only be purchased in whole shares. So if an ETF is priced at $25 per share and you had $80 to invest you could only buy 3 shares for $75 dollars. In a mutual fund you can buy decimals of shares. For example, if you still had $80 to invest and a share of a mutual fund was $25 then you could get 3.2 shares.
Mutual funds may have simpler, more hands-off reinvestment opportunities. That is, if you earn dividends, they may be immediately reinvested in your fund. ETFs, on the other hand, may charge a small fee for this transaction; however, you can also turn on automatic reinvestment of dividends for ETFs, as well.
Ultimately, choosing to invest in an ETF or Mutual fund will depend on your personal preference and the options you have based on where you are investing.
How do I know what’s right for me?
Once you’re ready to start investing, it’s normal to wonder what options are right for you, and for your specific situation. Your particular investment path will depend primarily on three key variables:
- Your goals: What are you investing for? Are you saving for retirement, or are you planning a destination wedding or dream house?
- Your time horizon: How long do you have to reach your goals?
- Your risk tolerance: Are you okay with being a little risky in hope of a larger return, or would you rather play it safe and let slow and steady win the race?
Knowing what investment strategy is right given your answers to questions 1, 2, and 3 above is the first step in finding the portfolio that’s right for you. Whatever your specific situation, however, ETFs and index funds may be a solid choice.
Here are some of the benefits of investing through an ETF or index fund.
Long-term growth potential
As we noted above, the focus with index-based mutual funds and ETFs is to match the slow and steady growth of the market. While downturns do occur, and there may be periods where your investment portfolio is looking rougher than you’d like, chances are still good that you’ll be able to grow your investments in the long run.
In fact, the average historical growth of the S&P 500 is around 10% a year. That means, by investing in index funds that track that market index, you may be able to make similar gains — averaged over the long term.
Higher chance of long-term gains vs other assets
Take another look at the chart displayed above. It states that over 80% of actively managed funds under-performed the S&P 500. This suggests that, when investors try to be clever and invest in such a way that they beat the growth of the stock market, eight out of ten times, they fail to do so.
Again, if your aim is long-term growth, you may have a higher chance of achieving it by simply using an index-based ETF or index-based mutual fund to steadily grow your money, rather than risking it on an actively managed ETF or mutual fund that tries to out-perform the market.
Relatively low fees
Actively managed funds also tend to cost more. That’s because they require fund managers to actively research and pick out securities to invest in. Index funds (whether mutual funds or ETFs) avoid this by requiring little maintenance from fund managers. So, fees for investing tend to be lower.
ETF & index fund essentials: How to get started investing
Getting started investing can seem daunting, especially with so many options and technical terms floating around. Don’t worry; there are simple, concrete steps you can take to start taking advantage of ETFs and index funds. Consider these options:
- Brokerage services: Brokerage services professionally manage your personal investment portfolio. They might help you plan for retirement, help you take advantage of tax breaks, or help you optimize investments for a specific goal. You can let them know you’re interested in investing in ETFs or through a mutual fund.
- Robo investors: Rather than paying for an expensive human broker, a robo investor allows you to open a retirement account or personal investment portfolio with just a few taps of your phone. Cleverly programmed algorithms tailor an account to your preferences, including investing in ETFs and index funds.
- Solo investing: You can choose to manage on your own and purchase a mutual fund directly from the company that runs it, or buy an ETF directly from a stock exchange. This might be a better option for those who know a bit about how to invest in stocks. (You may also want to take a look at our guide to investing mistakes to avoid before rushing to the exchanges.)
- Retirement allocation: If you have an IRA that you’ve set up on your own, or you have a 401k through your employer, there’s a good chance you may already be invested in ETFs or an index-based mutual fund. If not, it’s a good idea to consider these options as part of your portfolio.
ETFs vs mutual funds vs index funds, and actively managed vs index-based — the terms can be tricky, but with the right background knowledge, you can make informed investment decisions to help grow your future.
The post What is the Difference Between ETFs and Index Funds? appeared first on MintLife Blog.
Title: What is the Difference Between ETFs and Index Funds?
Sourced From: blog.mint.com/investing/etf-vs-index-fund/
Published Date: Tue, 28 Jul 2020 17:49:35 +0000
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Dividend Yield Formula: How to Calculate Dividend Yield
Whether you’re a seasoned investor or are just getting started, chances are you come across one investing term more often than others: dividend yield.
While defining “ In this post, we’ll explain what dividend yield means, why it matters, and show you how to use the dividend yield formula. Use the links below to navigate ahead, or read end to end for a more detailed overview of the topic.
- What is Dividend Yield?
- Dividend Yield Formula
- Important Notes on Dividend Yields
- Wrapping Up
What is Dividend Yield?
Before we define and learn how to calculate dividend yield, let’s make sure we’re all on the same page about dividends. Dividends are payments that companies make out to their shareholders for owning stock in their organization. Dividends can be earned from stock across a myriad of industries, including, real estate investments and consumer staples. Dividends are typically based on the company’s profit and performance throughout the year, and are generally paid out quarterly.
Definition of Dividend Yield
Dividend yield is the metric that can be used to help dividend investors anticipate how much a company pays out to shareholders in the form of dividends on an annual basis, compared to the current price of their shares.
Why does it matter? By comparing a company’s annual dividend share with the individual cost per share, investors can estimate their profit margins, and thereby, make more informed investment decisions.
Although calculating dividend yield can arm investors with essential information, it’s important to note that historical trends don’t always indicate future performance. In addition to finding a stock’s dividend yield, you may also want to consider some other variables and sources before making any investment decision—more on that a little later on.
How to Find Dividend Yield
To find dividend yield, you’ll need to start by identifying two important figures first: annual dividend per share and current share price. These numbers can both be found on the major stock market indexes. Note: to find the most accurate predictions, you’ll want to use the most updated data available.
Now that you have these details, you can calculate dividend yield using the dividend yield formula.
Dividend Yield Formula
To find the dividend yield, you must divide the dollar value of the annual dividend by the current share price.
Dividend Yield = Annual Dividend Per Share ($) ÷ Share Price ($)
Once you’ve divided the annual dividend per share by the share price, multiply the number by 100 to find the dividend yield percentage.
Dividend Yield Formula Example
To better understand how the dividend formula works, let’s take a look at a fictional example.
So if you buy shares today at $40 per share, you can estimate that you’ll earn 2.5% per year from dividends (before tax).
There are a few things to consider once you’ve calculated dividend yield:
- If you reinvest your dividends, you get 2.5% compounded. For example, if you had enough shares invested and received $25 in dividends, you could reinvest these dividends to buy 62.5% of an additional share of stock, and that portion of stock next quarter will then also pay you a dividend. You can increase the dividends you will earn each quarter by reinvesting them (assuming the dividend rate and share price stayed the same).
- The higher the stock price goes, the lower the current yield. For example, if the stock price rises to $55 per share, that $1 per share is reduced to 1.8% ($1 ÷ $55 = 1.8%). However, you should calculate your dividend yield based on the price per share that you paid when you bought stock, and not on what it becomes later.
- By the same mathematical reasoning, when the stock price falls, the dividend yield rises. For example, if the price per share falls from $40 down to $32, the dividend yield rises to 3.125% ($1 ÷ $32 = 3.125%).
Important Notes on Dividend Yields
Now that you know how to calculate a stock’s dividend yield, let’s take a closer look at how this metric can be applied to buying, selling, and strategizing for your investment portfolio.
Making the most of your dividends
Anyone who tries to time the purchase or sale of stock to maximize dividend income should be aware of how the dividend distribution dates are figured. The ex-dividend date is the date on which stockholders earn their respective dividends. However, investors should note that those dividends are not paid out until several weeks later. So before you buy or sell shares with the intention of earning dividend income, find out when the ex-date occurs. If you buy after that date (or sell before), you will not earn the quarterly dividend.
Using the dividend yield formula to evaluate investments
The dividend yield should be a part of your evaluation of your portfolio and in the selection of companies whose stock you are thinking of buying if you are using a dividend investment strategy. Some companies pay exceptionally high dividends and yet are considered very safe investments. This is not always the case, so if you just pursue the highest possible yield, it makes sense to perform a few fundamental tests first, and to determine whether or not it is safe to buy shares.
Never pick a stock based solely on dividend yield. But when all else is comparable, a higher dividend can work as a means for reducing your list of prospects.
In addition to calculating a stock’s dividend yield, here are some other things you can do to empower and inform your investment decisions:
- Think about investing in the context of your personal finances first. Only you can make the appropriate financial decisions for your lifestyle and goals. Use financial tools like Mint to help you gain perspective on where your budget and financial wellness stands.
- Understand the element of risk, and assess your comfort level. All investments involve some level of risk, from stock volatility to market changes, so it’s a good idea to establish your comfortability with investment risk first. Ask yourself how much you’d be willing to lose in the hopes that you’ll actually turn a profit.
- Consider your options. If you’re not comfortable plunging into the stock market just yet, you might look for other ways to start growing your wealth. High-yield savings accounts and retirement plans offer less-risky options to boost your bucks.
- Do your research. Publicly traded companies are required to provide consumers with important financial information so that those wanting to invest can make informed fiscal decisions. By looking to gov, Investor.gov, and other reputable sources, you can arm yourself with the knowledge to make the right decisions based on your goals.
Calculating dividend yield can provide some useful insight for investors looking to earn dividend income. To find this metric, simply divide the annual annual dividend per share by the current share price, then multiply by 100.
Investors should keep in mind that dividend yield is just one piece of the puzzle when it comes to vetting investment opportunities. Doing extra research, reviewing historical trends, and considering your own financial goals will help you make the best decision for your financial health.
Need help tailoring your investment strategy? Head over to our investment calculator to start crunching the numbers!
Michael C. Thomsett is author of over 60 books, including Winning with Stocks and Annual Reports 101 (both published by Amacom Books), and Getting Started in Stock Investing and Trading (John Wiley and Sons, scheduled for release in Fall, 2010). He lives in Nashville, Tennessee and writes full time.
Investing 101: How to Calculate Dividend Yield was provided by Minyanville.com.
The post Dividend Yield Formula: How to Calculate Dividend Yield appeared first on MintLife Blog.
Title: Dividend Yield Formula: How to Calculate Dividend Yield
Sourced From: blog.mint.com/investing/investing-101-dividend-yield-01042011/
Published Date: Wed, 15 Jul 2020 19:21:24 +0000
Stock Card Review: Easy and Effective Stock Research
What if there was a way to cut through the massive amount of data we face when analyzing stocks? There is more data available to individual investors than ever before. Efficiently summarizing all that data and trying to make sense of it in a way to make actionable decisions can save us all a lot of time. This is what a service like Stock Card strives to do.
What is Stock Card?
Stock Card is a tool that lets you cut through a lot of the complexity of the market and summarizes stocks into ratings in a few categories. This way of looking at stocks makes it easy to see what the advantages and limitations of each stock are. When a stock is performing well, you can easily see that at a glance without having to dig into the numbers. But the interface is not so simplistic that it ignores value. Stock Card aims to give users an easy-to-use overview of the market.
What does Stock Card Offer?
Stock Card allows you to research specific companies that interest you, find new stock ideas, and monitor a portfolio quickly and efficiently. You can filter through thousands of stock symbols to find particular categories that interest you, like “undervalued stocks” or “company strength.”
Each stock is represented with a square made up of four quadrants. These quadrants are “growth” at the top left, “strength” at the top right, “performance” at the bottom left and “value” at the bottom right. Growth is represented by a chart segment, strength by a dumbbell, performance by a building with columns and value with a rectangle and a dollar sign.
A color is given to each quadrant based on whether the stock is good, neutral or bad in that aspect. For example, Apple (NASDAQ:AAPL) is green in all quadrants except value, as it almost always trades at a high multiple. Electrolux AB (OTC:ELUXF) is gray in the value quadrant because there is not enough information to estimate the value of the company’s stock. The site uses green for “good,” yellow for “neutral,” red for “bad” and gray for “unclear.”
Research Specific Companies
You can research a certain company by typing the stock symbol into the search field under “Research Specific Companies.” Let’s use EEFT as an example. The site brings up a summary page, which lays out many interesting insights about the stock.
On the left side of the page, you can see how many users viewed the stock, how many are following and watching the stock, how many own the stock and how many have sold the stock. On the right side of the page, you will see many quantitative and qualitative measures of the stock. The company’s high growth potential is identified as good, while “Stable operations”, “Same return as the market” and “Fair share price” all cause a neutral rating.
You can click on each of these cards for more analysis so you can dig into exactly what is driving each rating. A meter shows the investor sentiment for the stock. The “Investors’ strategy for EEFT” section shows what investors from the Stock Card community plan for this stock. You can click the box and add your own strategy to the record. At the bottom of this area, the stock chart for EEFT is displayed.
Below the analysis section, there is a box containing key information for the stock. Information discussing the business’s operations, the IPO date, and the company’s market value are all laid out in an easy-to-read format. A link is provided to the company’s investor relations website, making it easy to dig deeper directly from the source.
Additionally, the “Industries, themes, and country” box shows the categories that the stock fits into. You can see that EEFT is a technology and software-related company. You can use these collections to find similar stocks based on these traits. Lastly, the “Earnings report and dividend-related dates” box shows earnings release dates and dates related to the dividends for the stock.
At the bottom of this page, we have the content that anchors from the cards at the top of the page, which goes into detail for each rating. We see that the company has high growth potential because the “Technology” sector as a whole is expected to have moderate growth and the “Software – Infrastructure” sector is expected to have high growth.
The next box is Stable operations, which is a mixed bag regarding EEFT. There is a combination of positive and negative signs that combined to contribute to the moderate rating. “Stable operations” is split up into important segments, such as Sales growth, Profitability, Cash availability, and Management effectiveness.
You can click on each of these to drill down into why each of these subcategories got the rating they did. You can similarly drill down on the next cards, “Same return as the market” and “Fair share price.”
Next is the Investor Sentiment card. This card uses a variety of fundamental and technical indicators to measure the investor sentiment for the stock. These include the Chaikin Money Inflow, Short Interest, Simple Moving Average and Relative Strength Index. With EEFT, you can see that all the measures are neutral except for the simple moving average, which is bearish.
Then we come to the Analyst Consensus section, where you see a pie chart of how financial analysts see the stock. With 9 buys and 2 holds, analysts are bullish on the stock.
The Qualitative Research card shows the areas of strength, things to watch and reasons to worry.
Discover Interesting Stocks
By clicking “Find Interesting Stocks” on the Home page or Discover on the menu bar at the top, you arrive at the Discover page. This page shows you Your View History, “Stock Cards You Follow” and suggests other stocks based on the stocks that you have previously viewed. Other tabs include “Featured Themes,” which shows you original collections of stocks grouped together to fit a theme.
For example, Microsoft, Slack Technologies, and Zoom are all components of the Work-From-Home theme. Other themes include “Companies shaping the future” and stocks that fit a particular style investor, such as stocks for dividend seekers or risk-takers.
“Popular on Stock Card” gives you the most-viewed cards, the top gainers and top losers for that day, and stocks reporting earnings today or this week. The “All Stock Cards” tab gives you all the available stocks, which you can narrow down using the filters on the left.
The filters on the left allow you to filter out stocks based on stock price, market capitalization, growth potential, company strength, past investment return, value, dividend yield and the age of the stock card.
Monitor Your Investments
Clicking on “Monitor Your Investments” from the Home page or clicking “Monitor” on the top menu takes you to your Portfolio page. Here, you can see your view history, which forms a portfolio of its own and you can see how it would perform. You can also see your watchlist and add or remove stocks from it. You can track the performance of your watchlist as well. Finally, you can create an unlimited number of portfolios and you can track their performance.
Get Well-Researched Picks
Clicking “Get Well-Researched Picks” on the Home page or clicking the “Stock Picks” option on the top menu gets you to the Portfolio Store. Only subscribers to the VIP plan can view the stocks in these portfolios. This feature offers you many well-performing portfolios and a few that haven’t performed so well.
For example, Phoenix is a portfolio composed of COVID-19-resilient companies like Slack Technologies and Clorox. This portfolio gained 86.76% from March 31, 2020 to August 3, 2020. However, The Green Fund, a portfolio of cannabis-related stocks, didn’t perform so well in the face of COVID-19, losing 82.16% over much the same period.
Here are some things that stand out about Stock Card that make it an excellent tool for stock analysis.
Great for Beginners
Stock Card is great for individuals who are new to investing and is a great way to offer investing newbies a simple and easy-to-grasp view of stocks. It clearly defines the four categories that make up a stock rating, making it easy to pick out stocks that fit all the criteria.
These are all solid criteria for judging stocks, but experts will have the advantage of being able to interpret the nuance inherent to each category. The simplicity of the analysis may be a good starting point for an expert, but the site is just what a beginner needs.
Simple Interface and Great Community
You can’t get much simpler than abstracting stocks down into a set of cards, and that’s what Stock Card aims to do. The website is uncluttered and very clean, with no wasted space. In addition to the Stock Card site itself, there is also a blog, podcast, Facebook group and YouTube channel.
The blog gives you good information about starting to invest in stocks and about the different categories of stocks. But much of the content leads you back into the site into parts where you will need a premium subscription. Their YouTube channel provides a lot of video content about how to use the site effectively.
The Starter plan limits you to five stock cards each month. In order to really dig into a particular group of stocks or a sector, you will need access to more. Luckily, the Prime and VIP plans are affordable—$11.99/month and $14.99/month respectively at the time of this writing.
The Prime plan allows unlimited stock card views and allows you to request three stock cards for lesser-known companies.
With a Stock Card VIP plan, you get to make three stock card requests with priority response. Also, VIP plan members get the Stock Card Team’s decision for each stock card, which is a quick overview on whether the stock is a good investment and why. The VIP plan also nets you the Portfolio Store, Weekly Stock Picks and a Monthly Investment Theme.
Given all its advantages, Stock Card is probably not for everyone. Here are a few limitations that the platform suffers from.
Probably Not Enough for Experienced Investors
Experienced investors may find Stock Card a good starting point or a kind of advanced stock screener, but they are unlikely to really feel the need for it. Fundamental traders and value traders might feel more at home here, but even they will want to dig deeper than what the site provides.
The service does a good job of summarizing fundamental measures into magnitudes (good, bad, etc.), and incorporates many value investing metrics like price-to-book and price-to-sales. Other software like Stock Rover are probably better-suited for experience investors who are detail oriented.
Starter Plan Too Limited to be Useful for Extensive Research
The Starter Plan, which is free, only allows you to view five stock cards per month. While this may be perfectly adequate for someone new to stock investing, someone who wants to really dig into finding stocks meeting certain criteria they’re looking for will need to upgrade to the Prime or VIP levels.
Is Stock Card for You?
If you are a beginning trader or someone with a budding interest in the stock market, Stock Card would be a great tool to view the vast array of stocks out there in a way that clearly frames them in an easy-to-digest way.
If you are an experienced investor with a fundamental or value investing perspective, Stock Card may be an interesting experience for you. While the data is mostly quantitative figures expressed in a qualitative way, it may be a good way to cut through some of the noise similar to how you might use a stock screener.
Read more great articles at Vintage Value Investing.
By: Dillon (Mr. Vintage Value Investing)
Title: Stock Card Review: Easy and Effective Stock Research
Sourced From: www.vintagevalueinvesting.com/stock-card-review-easy-and-effective-stock-research/?utm_source=rss&utm_medium=rss&utm_campaign=stock-card-review-easy-and-effective-stock-research
Published Date: Wed, 12 Aug 2020 15:37:05 +0000
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