The Pop in Your Portfolio Edition
10 December 2012
Change in Analyst Estimates in StockCentral Data
By Doug Gerlach
StockCentral.com has renewed its contract with Morningstar Inc. to continue to provide fundamental equity data, prices, dividends, and sector/industry classifications that are used on the website and in ICLUBcentral programs such as Toolkit 6 and Stock Prospector. There is one small change in the data that is noteworthy for users.
Effective Jan. 7, 2013, the provider of analyst consensus estimates in the data service will change from Zacks Investment Research to Morningstar Inc. Roughly the same number of companies will be covered with long-term (three- to five-year) EPS estimates, amounting to approximately 2,200 companies.
It's important to note that the earnings estimates displayed continue to be analyst consensus estimates (ACE) data, collected from a number of different equity analysts from both the buy and sell side, each tracking a particular company. Although Morningstar equity analysts may provide input to the data set, these values aren't the single estimate from the Morningstar analyst. Morningstar is simply becoming another aggregator that provides Wall Street analyst estimates, just as Zacks was providing in the past.
Defining Organic Growth for Investors
In the StockCentral classroom, subscriber Lynn B. wonders what experts mean when they talk about "organic growth" in mutual fund company analysis. As Lynn writes, "In the book Financial Shenanigans, Howard M. Schilit notes that companies often toss around the phrase 'same store sales,' but definitions can vary among organizations and companies might change their own definition of this metric. How does the Investor Advisory Service define organic growth?"
StockCentral presented the question to Scott Horsburgh, CFA, of the Investor Advisory Service's analyst team, and here is his response:
"The definition of 'same store sales' can differ from company to company. However, it would be dirty pool for a company to change its definition without disclosing it publicly. Almost all retailers define it as the change in sales at stores open more than 12 months. Typically, the 13th month is compared to the first month the store was open. Occasionally, some stores might start at a later month such as if the first month is a gala affair with huge sales at a low margin. Some companies start after two years. Consistency within the company is more important than the exact method chosen.
"Organic growth definitions also differ. We prefer to focus on sales excluding acquisitions, divestitures, and foreign currency translation. If meaningful, we also occasionally separate out what portion of organic growth comes from unit volume versus price increases."
Read More . . ..
Looking to Put Some Pop in Your Portfolio?
Meanwhile, over in the StockCentral stock forums, subscriber Mary W. shared her Toolkit 6 stock study of SodaStream International (SODA), a New Jersey-based company whose products enable consumers to make soda water at home in dozens of flavors. Doug Gerlach took a quick look at Mary's study and a few questions bubbled to the top:
"I took a look at your stock study for SodaStream in Toolkit 6 and didn't spot any concerns with any of your judgment. With analysts projecting growth much, much higher than the 15% that you used, it seems like there is a lot of upside with this company at its current price. The price right now looks really inexpensive!
"My questions about SodaStream would be about how much demand exists for the product. Is it a 'fad' product or will this be a product that's around for a long time? Would it be hard for other companies to get into this business . . ."
Have you taken a look at SodaStream? Download Mary's stock study and share your thoughts in the StockCentral forum.
Pre-Order Federal and State Club Tax Printers
It's that time of year again — ICLUBcentral's Club Tax Printers for 2012 are available for pre-order. The Club Tax Printers make it a snap to prepare your club's required IRS filings, all from within your club accounting software. Hiring an accountant or tax preparer to complete your forms would cost hundreds of dollars! There's no easier or quicker way to prepare your required tax filings than by using ICLUBcentral's Club Tax Printers.
ICLUBcentral Club Tax Printers will be available for both federal and several state returns. The states supported by the ICLUBcentral State Club Tax Printer for 2012 are Arizona, California, Colorado, Georgia, Indiana, Iowa, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, New York, and Pennsylvania.
When released, Tax Printer programs may only produce draft forms, which cannot be used to file with the IRS or your state agency. However, the software features an auto-updater, which will automatically download and install the final forms after they are approved by the IRS. Then you can quickly print the final tax documents for your club. Read more about draft and final forms.
Buy your Tax Printer software now! You'll receive special early bird pricing by ordering before Dec. 31, 2012. (StockCentral subscribers save even more!) If you're the treasurer of your club, get approval at your next club meeting to pre-order your club's Tax Printers and stay tuned to your e-mail inbox and the ICLUBcentral homepage for 2012 Tax Printer updates.
Pre-order today!
Gerlach to Present at World MoneyShow
ICLUBcentral's very own Doug Gerlach will be educating the masses on stock investing at the World MoneyShow, Jan. 30-Feb. 2 at the Gaylord Palms Resort & Convention Center in Orlando. Doug will discuss small-cap stock investing at 4 p.m. on Feb. 1. He's provide tips, insights, and investing ideas for small-company stocks to help enhance your or your investment club's portfolio. He'll also reveal the five rules of small-cap stock investing as well as outline common pitfalls to avoid in pinpointing small-company opportunities. At 11:30 a.m. on Feb. 2, Doug will teach attendees dividend analysis for growth stock investors. He'll cover concepts such as yield, the payout ratio, and the importance of not chasing dividends in your stock portfolio. Make sure to register for the free event and stop by to say hello to ICLUBcentral's growth stock guru.