Stock Insights on Finstead… Our Fresh New Start

Proj Omni | Dec 29, '16

Investing in stocks is a risky value proposition, no doubt.  For a while, we’ve been trying to help retail investors come up with better investment decisions--and we started with stocks as the first security category we’re going to cover.  Why stocks?  It turns out that, despite what finance professors will tell you about the risks of investing in individual stocks, 30% of Americans consider stocks good investment opportunities and continue to actively trade them.  

Let’s rewind the movie a year ago, when we first launched Finstead.  At that time, we wanted to tell retail investors about equity analysts’ and bloggers’ track records, so they can figure out whose stock recommendations to follow, and whose to ignore.  We rated analysts and bloggers and assigned a Karma score to each of them, based on the success of their previous stock recommendations.  Useful, you’d think.  It tooks us a couple of months to figure out that Karma, as the sole indicator of whose opinion to follow, is not super useful.  As a once 5-star analyst turned into a 3-star analyst three months later, only to become a 1.5-star analyst 6 months down the road, we’ve realized that recommending investments based on analysts’ track records is a moot value proposition.  Also, having read many finance research papers, we’ve realized that most finance academics and practitioners disagree with the notion of “stock picking” by following prominent, ‘successful’ investors.  So we embraced that learning, scrapped the first version of Finstead, where we graded stock pickers and calculated “outlooks” for individual stocks, and moved on.   

So what are we offering now?  Because investing in individual stocks is a very delicate business (and you may want to be extra careful about it or completely abstain from it), we’d like to provide you with some data points that will help you make better informed decisions.  “Hold on a sec”--you’re wondering--”I can go to Google Finance or Morningstar and get all the data I need.”  True, but in many cases, you may not have a clear picture what the financial metrics and numbers means.  What is a P/E ratio and how is it calculated--is it forward or backward looking?  Is a P/E ratio of 20 good or bad?  How does one company’s P/E ratio compare to that of competing stocks?  Is it higher or lower than the average S&P 500 (or pick any other index) P/E ratio?  Many questions to answer to better understand just one metric and number.  Imaging you have to do this analysis for all keys stats and all stocks you may be interested in--that analysis could easily take hours, if not days or weeks. So instead of you having to crunch the numbers yourself, let us do that work for you and offer you some insights and thoughts about stocks you may be interested in.  

In this version of Finstead, you’ll be able to find three main categories of information about stocks: 1.  Quantitative analyses and insights (for the sake of brevity, we called this section “Insights”);  2.  news;  3.  opinions.  Insights cover quantitative AHAs, such as price range (what’s the stock price now vs. the 52-week high/low?), dividends, returns, financials (revenue, profit), valuation ratios (P/E, PEG, Price/Sales, Price/Book, etc.), shares (trading volume and shorting activities), and outlook (analyst ratings and price targets).  News cover the latest developments about companies (or securities) from reputable sources, and opinions contain bloggers’ perspectives, along with your own thoughts on individual stocks. 

Below is an illustration of what we offer on Finstead Insights. A historical return for a stock is a relevant piece of data, but it’s even better if you can provide some context around how that stock return compares to the industry, sector and S&P 500 returns.  

Check out the latest Finstead release.  Let us know your thoughts--send us your feedback, ideas and requests to hi@finstead.com!


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