Updating Companies

Created by Lynn OstremCrow River Investment Club

www.bivio.com/crowriver

What’s this all About?When we originally purchased our stocks, we

looked for 3 things:

1. Good strong fundamentals;

2. Good future growth prospects; and

3. At what price the stock was attractive;

Why Update? To make sure the fundamentals haven’t

changed;

To make sure the stock is growing at the rate we intended; and

To determine whether or not the price merits adding to our position.

What do we Monitor and When?

1. Monthly – we update the Price

2. New Value Line –we update the Basic Data

3. Quarterly – we update Sales, Pre-Tax Profit, Earnings and Taxes

4. Annually – we update year-end screen

5. Whenever a material event changes our numbers – stock splits, restatements, etc.

Monthly

Price:

With our SSG judgments in place, we want to update the price to see if it falls within our buy range.

When do we get the price?

Friday before the meeting, after Market Close (4 p.m. CST)

Where do we get the price?

Our Bivio WebsiteAny Financial Website Automatically from the Internet

from our Bivio Website

from www.multexinvestor.com

from the Internet

Just click and go!

Where do we put the Price?

New Value Line

Quarterly

Do you see all 4 boxes??

If not: Click on Preferences --

Then on Stock Study --

Now click on the last option…followed by the OK button

Now you will see 4 boxes!1. Make sure the quarter is correct.2. Then enter the 4 numbers.

How do we Line up Quarters?

Let’s look on the Value Line…

Last 5 non-bold and non-italicized numbers whenfilling out a new SSG.

To find the correct year-end, use Footnote A on the Value Line…

Where do we get PTP & Taxes?

Answer: The Income Statement

SEC Filing 10Q from Edgar Company’s Annual Report Multex Investor Website Company Press Releases Or, the NAIC datafiles (automatically)

The Income Statement

The 4 items we need to find on the Income Statement are:

Total Net Sales or Revenues Income Before Taxes (Pre-Tax Profit) Income Taxes Diluted Earnings Per Share

In most cases, we willRound to 1 decimal…Sales 767.4PTP 51.6Taxes 17.4Expect EPS (.34)

Why do we track these items?Answer:

These are the fundamentals that will help us determine whether or not management is doing a good job.

We need them for the Pert Report…coming up in our next study.

Annual Update

Annual Update

Annual Update

New row for completed year!

Annual UpdateEvery year, we will also do the following:

Review Company’s Annual Filings Update the SSG Review our judgments Report on our findings to the club

Material EventsA Material Event will change our SSGs. Here’s

an example or two that could cause this:

Stock Split Restatement of financials

AcquisitionSale of a divisionAccounting error, orFASB accounting change

Stock Split

When a stock splits, we get twice as many shares but our price is cut in half. We can handle this by clicking here:

Stock Split

When the Split Box appears, you simply add the splitinformation and click OK.

It will automatically split your current and historical shares, high and low prices and per-share figures.

Restatements

Double-check annualFigures every so often.

If the numbers are Different, then a re-Statement has occurred.

Re-enter all the data.

Recap

Stock Watchers! Every month:

Update prices Review the value items on the back of SSG Check the news Review judgments

Recap

Quarterly:

Perform Monthly update Check for a new Value Line Update Sales, PTP, Taxes & EPS And listen to conference calls!

Recap

Annually:

Update all aspects of the SSG Read company’s annual report Review judgments Provide club with a full annual update

Recap

And, every now and then, check for restatements and new Value Line information.

Questions??

Next Month:We start our series on the PERT Report