I research stocks all the time, and I’ve been doing this for decades. I have my favorite research sources that I have trusted for years—some free, some not so free—and I’m always on the lookout for new sources that might be even better. Today, I wanted to share the best investment sites (in my opinion) with you.
Among sites requiring paid subscriptions, I use Value Line, Investor’s Business Daily eTables, Zacks, American Association of Individual Investors (AAII) and Barron’s. I utilize these services to provide me with reliable data, opinions and ratings to help me select my database of 1,000 stocks. From there, I analyze the stocks to find undervalued stocks with excellent prospects for future growth.
I also check out free websites, which help me conduct some due diligence to double-check my data and conclusions. I strongly recommend that you also develop a system to double-check the information you have gathered and the advice you have received. Your investment results will improve greatly if you take the time to dig a little deeper.
In the interest of teaching you how to become a better investor, I have compiled a list of the best investment sites that can help you make informed investment decisions. My best-of-the-best online resources appear below under the general categories of Education, Research, News and Tools. (Our Cabot website, of course, covers all of the categories extensively!)
Cabot Investing Advice: www.cabot.net
Any list of the best investment sites has to start with the one you’re currently reading!
Cabot's website contains a wealth of free information describing our investment advisories and expert analysts, showing our latest stock picks and providing a daily market update. The education section has valuable information on such topics as Stock Market Analysis, Market Timing, Selling Stocks, Technical Analysis and many others. Additional information is available on Growth Investing, Value Investing, Emerging Markets, Stock Options and Small-Cap Stocks.
AAII Investor Classroom: www.aaii.com/classroom
Contains various lessons covering everything from managing risk to evaluating dividend stocks. Best of all, you can easily find guidance on a specific investing topic. The cost to join is only $29 a year.
This is an excellent source for definitions of financial terms. In addition, the site has tutorials and articles broken down by investment level and style, such as Beginners, Active Traders and Retirement. Free.
Research & Analysis
Security analysis falls into two broad categories: fundamental analysis and technical analysis. Fundamental analysis involves analyzing the characteristics of a company in order to estimate its value. The process includes examining a company’s financial statements and financial health, its management and competitive advantages, and its competitors and markets.
By contrast, technical analysis focuses on price and volume activity of a stock. In its purest form, technical analysis assumes that all the fundamental factors of a company are reflected in the price of its stock. Technical analysis studies the market supply and demand in an attempt to identify where a stock’s price will go in the future.
AAII Stock Screens: www.aaii.com/stock-screens
The Stock Screens area on the AAII site offers both education and investment ideas for members looking to construct and manage a stock portfolio. The area profiles more than 60 strategies grouped by investment style. Members can read about factors that make each approach unique, see how a hypothetical portfolio following each approach has performed during various market environments, and access stocks filtered by each screen. The cost of an annual membership is $29.
Morningstar.com is a reliable source for fundamental stock data including historical data, financial statements and price data for individual companies. Morningstar is also the leading source for mutual fund and ETF data, offering a wide range of performance information. The site also includes a comprehensive screener and mutual fund ratings. The basic service is free, which includes five years of data. The premium service ($189/yr.) offers 10 years of data and comprehensive research tools including portfolio tracking, analysis and optimization.
SEC EDGAR: www.sec.gov/edgar/searchedgar/webusers.htm
The Securities and Exchange Commission (SEC) publishes filings for publicly traded companies in its EDGAR system. Pay particular attention to Form 10-K, which is a company’s annual report and a gold mine of information. Form 10-Q includes complete quarterly information. Free.
Seeking Alpha: www.seekingalpha.com
Seeking Alpha publishes quarterly conference call transcripts for many companies. These transcripts can offer insight into a company’s performance over prior quarters and management’s outlook for the future. Registration is free.
State of the Markets: www.stateofthemarkets.com
The Market Analysis section contains latest stock market information before the market opens, extensive updates during the day, and Dave Moenning’s daily “State of the Markets” analysis. Free.
Many sites offer price charts, but StockCharts is more advanced with additional charting options, educational content and extensive technical analysis. StockCharts also offers a broad collection of scans for technical conditions, including candlestick and point & figure patterns. Free real-time price charts. The basic service is free; premium service is $19.99/month.
The site provides a stock screener, sorting capabilities, charting, individual company information, technical data and a portfolio tracker. The basic service is free, but a premium subscription allows you to download data into a spreadsheet at $250/year.
Zacks Investment Research: www.zacks.com/earnings
Offers comprehensive data for more than 5,000 companies, including sales and earnings estimates, revisions and past surprises. The basic free service offers lots of information; the premium service includes even more at $249/year.
Barron’s includes its own articles, and articles from some of the other best investment sites—The Wall Street Journal, Dow Jones Newswires and MarketWatch. A subscription is required to read the actual articles from Barron’s and The Wall Street Journal. The $52 per year introductory rate is well worth the money.
Bloomberg offers extensive economic, business and stock market news plus live streaming video. The site also carries a comprehensive economic calendar. Free.
CNNMoney aggregates news articles from a variety of credible sources along with fundamental and technical data for each query. The site does a good job of highlighting breaking news. Free.
Another good company news website. MarketWatch features articles from leading sources including WSJ.com, Barron’s, TheStreet.com and Seeking Alpha. The site also contains company press releases to give you “unfiltered” news about a company as well as articles with an analytical slant. Marketwatch also provides historical stock prices with charts. Free.
Yahoo is one of the best investment sites for industry and sector news. The site also offers the top business news, company briefs and personal finance. Type in a ticker symbol, and you will receive a current quote, flexible chart, message boards and the latest news on your company. Free.
This site featured up-to-date rate comparisons for bank accounts, CDs, mortgages, credit cards and insurance. Bankrate also offers extensive collection of personal finance calculators, income tax resources and tools. Free.
Discount Brokerage Research
I have accounts at two discount brokers and they both offer research on stocks and mutual funds from third-party services. While the research offerings differ, most top discount brokers give their customers free access to research reports from companies such as Morningstar, Thomson Reuters and Standard & Poor’s.
Investor Relations Websites
Simply type the company’s name or ticker symbol followed by “investor relations” in a search engine such as Google. The investor relations section of a company’s website can offer a large amount of information including presentations, annual reports, dividend history, press releases and calendar of upcoming events.
A Simple Stock Screen That Works
Although I use free websites mostly to double-check my data and conclusions, I also use some free sites to find stocks. My brokerage firm’s handy website provides screening tools to find stocks fitting my requirements (listed below). Your broker likely has similar screening capabilities.
Holding a good portion of your portfolio in companies that meet this list of criteria will greatly reduce your chances of suffering large losses during unforeseen market declines.
My best screen, using Standard & Poor’s data, is easy to create and filters to find companies that meet the following four criteria:
S&P (Standard & Poor’s) Star Ratings of 4 or higher (5 is best)
S&P Fair Value Rankings of 4 or higher
S&P Quality Ratings of A- or higher
Dividend yield greater than 1.0%
One Undervalued Stock with Low Volatility and High Quality
One company that currently fits my screening criteria for undervalued stocks with low volatility and high quality is CVS Health (CVS).
CVS Health (CVS: Current Price 97.00) is the leading pharmacy and drug management services chain in the U.S. During the past several years, the company has made several major acquisitions which have enhanced CVS’s growth beyond expectations. The company’s latest acquisition of pharmacy services manager Omnicare is producing better than expected sales and earnings results. CVS will likely continue its aggressive acquisition strategy in future years.
I expect sales to advance 14% and EPS (earnings per share) to climb 19% to 6.18 in the next 12 months ending June 30, 2017. New drugs from drug makers and the wider use of generic drugs will keep earnings growing rapidly well into the future. Recent acquisitions will add noticeable sales and earnings growth in 2016 and 2017.
Recent acquisitions, including Omnicare and the healthcare clinics of retail giant Target, will provide a big boost to sales. CVS will convert all of Target pharmacies to the CVS Pharmacy brand by the end of the summer. The company will launch a major marketing program soon after.
CVS has increased its dividend more than 10% every year during the past decade at a compound growth rate of 24% per year. The most recent 20% hike in December boosts the current yield to 1.8%. Despite all the hikes, the company only pays out 32% of EPS to shareholders. The company has been paying dividends since 1916.
CVS shares have dropped 15% from the stock’s 52-week high, and are now undervalued at 18.7 times latest EPS. Additional acquisitions could push sales and earnings higher than expected. The company’s balance sheet is strong, and my risk rating for CVS is very low risk. Standard & Poor’s rates the company 5 Stars, 5 for Value and A+ for Quality. CVS’s stock price will very likely reach my sell target within 12 to 18 months. Buy.