1. Stanford’s Premier Investing Group
Charles R. Blyth Fund
Stanford’s Premier Investing Group
STOCK ANALYSIS 101

2. Who are we? Student-led investing group on campus
Manage $140k portfolio of mostly stocks
Focus on teaching students investing through hands-on valuation
Meetings MW 5:15-6:15PM Wallenberg 120
STOCK ANALYSIS 101
4/21/2017

3. Training Session Plan
Goal: Although you are in a trading competition, you need to build your fundamental investing skills before your technical skills
Session 1: Stock analysis basics
Session 2: Ratio analysis
Session 3: Technical analysis
STOCK ANALYSIS 101
4/21/2017

4. Key Takeaways How do I research a stock?
What qualitative factors do I need to consider?
What quantitative factors do I need to consider?
STOCK ANALYSIS 101
4/21/2017

5. How do I research a stock?

6. How do I research a stock?
Start with the Annual Report (10K)
Google Finance, Yahoo! Finance, Wall Street Journal
Investopedia
Let’s now show you how to navigate these resources
STOCK ANALYSIS 101
4/21/2017

7. How do I pick a good stock?
Fundamental Analysis
Qualitative Questions
Quantitative Questions / Financial Statements
Technical Analysis
Charts, graphs
Recent News
STOCK ANALYSIS 101
4/21/2017

8. What qualitative factors do I need to consider?

9. Qualitative Questions
Does the company have significant competitive advantages/barriers of entry?
How has the company performed historically?
What risks are involved in investing in the company?
How much debt does the company carry?
Are they making lots of money?
Where does the company’s money go?
STOCK ANALYSIS 101
4/21/2017

10. Qualitative Factors Business Model – How does the company make money?
Competitive Advantages – What makes the company unique? Barriers of entry?
Risk Factors
Management
STOCK ANALYSIS 101
4/21/2017

11. What quantitative factors do I need to consider?

12. Quantitative Analysis
Part I: What do the financial statements say?
Part II: What do its financial ratios say?
Part III: How can charts & technical analysis help me trade better?
Part IV (Advanced): How much is this company truly worth?
Note: Today we will only be focused on Part I.
STOCK ANALYSIS 101
4/21/2017

13. Financial Statements On Google Finance or Annual Report (10K)
Three Main Statements
Income Statement
Cash Flow Statement
Balance Sheet
STOCK ANALYSIS 101
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14. Income Statement
STOCK ANALYSIS 101
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15. Cash Flow Statement
STOCK ANALYSIS 101
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16. STOCK ANALYSIS 101
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17. Balance Sheet
STOCK ANALYSIS 101
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18. Now what do I do?
Run through company’s statements line by line and figure out:
What are the trends?
Why are there such trends?
Income Statement Questions
Has the company consistently been turning a profit?
What are its sources of revenue / expenses?
Cash Flow Statement Questions
Has the company consistently been making cash?
Balance Sheet Questions
Does it have enough assets to cover its debts?
STOCK ANALYSIS 101
4/21/2017

19. Why are these useful?
Foundation for understanding how much a company is worth
Used for ratio analysis and other “fair value” analysis
Not used for technical analysis
STOCK ANALYSIS 101
4/21/2017

20. Key Takeaways How do I research a stock?
Annual Report, Google Finance, Investopedia
What are qualitative factors I need to consider?
Business Model, Competitive Advantage, Growth
What are quantitative factors I need to consider?
Financial Statement Trends
STOCK ANALYSIS 101
4/21/2017

21. Action Items
Pick a company that you like in an industry that you’re interested in
Read the company’s Annual Report (10K)
Look through the company’s financial statements on Google Finance and see if you can identify trends
STOCK ANALYSIS 101
4/21/2017