Saturday, June 2, 2007

Where I get financial data

If I had lots of money I would pay Standard and Poor lots of money and I would get their Compustat database with some visualization software. However I don't so I have rolled my own. Here is a brain dump.

Where do you get financial data? Here is where I get mine.

1) Yahoo finance.
This is a pretty good site. I won't go into it in detail but you can find lots of financial data here as well as stock price charts and a message board (alas with too much spam). The problem with yahoo is that you can't get much for financial data from more than two year ago. It is good for short term info but not so good if your looking for 10 years worth of earnings data. You can also look up historical prices here. Other info you can find here are short ratios, EV/EBITA, Analyst estimates etc.

2) MSN Money
A good place for a 10-year history of profitability is MSN Money. For example, go here to get the 10 year profile for IBM.
The key things to note on here are the 10-year, net profit margins, return on equiy and assets.
When I want to look into a company that I know nothing about, I go here first. One glance at this table and I can see whether the company is profitable and stable or otherwise.

3) Morningstar
This is a great site for info about stocks. I pay $9/month or so for the premium membership. Here you can find loads of info about the companies. One of the best things are the analyst reports where you can learn a lot about the companies. They also gives recommendations for whatever that is worth as well as rate the management and tell you whether they believe the company has an economic moat (i.e. barrier to entry). Unlike bank analysts, they don't have conflicted interests. The other great thing is the stock screener. This is the best that I have seen. There are hundreds of parameters to screen on. You can even screene on things like their Morningstar management grade. You can also get 10-year financial data from the three financial statements. Highly recommended.

4) Scottrade
This is the discount broker that I use. One of the things that I like about it is the access to Standard & Poor Stock Reports which are similar to Value Line reports. You can also buy these in book format from your bookstore . Obviously, I prefer the electronic PDF format. I can also save these to my laptop and use them as a database. They have 10 financial data and in a more useful format then most other places. Again, if I were more savy (or had more time), I would write some software to extract the data from the PSF files and store them in a more structured way. What I have been able to do is write a piece of code which prompts the user to highlight the table of 10-year financial data and cut and paste it into a file. Then it stores this into a simple text file and makes the following plot using Bed Bath and Beyond (BBBY) as an example.

I know that is a lot to take in at once but by looking at this, I get to see every financial aspect of a company in a single glance. Every box shows a 10 year history of some financial quantity. The top three (left to right) book value per share, earnings per share and cahsflow per share. In the sixth row you see the Returns on : assets, equity, invested capital, total capital, capital and tangible capital. I won't go into the details here about what the differences are. The three on the left of the bottom row are P/E, pretax earnings yield and free-cash flow yield. I can click on any box to see the growth rate calculations. I can also see the number of shares to see if the company has been buying back shares or diluting. This is extremely useful. I don't know of any other way to visualize this data without paying someone a lot of money to write some kind of software to do this. S&P also gives the stocks a rating 1-5 stars and over the past decade, this has proven to be market beating advice. Whether that will continue is anyone's guess.

5) National Association of Investment Clubs
I decided to pony up $49/year to join this. I haven't explored here too much. I joined only to get a hold off their compustat database. You don't get the whole data base but you can search by ticker and get a complete financial history of a company. For example I can get the earnings for JNJ or GE all the way back to 1950. Pretty cool. I can save these html files with a simply keystroke. I wrote some software which then reads these html files. That way I can make a little database of companies that I haved looked up. If I were a bit more savy, I would be able to write a program which fetches this info without having to use a web browser. Maybe in the future. I also have written some code which makes plots of this data and calculates growth trends. For example this is one for JNJ.

This is very useful when you want to know the long term picture of the company. Unfortunately, this only gives you the long term picture of the PAST. The version which calculates the future earnings is still in development ;)

6) Insider trades.
You will want to keep track of insider trading (the legal kind). This is especially important with small obscure, out of favor or ignored companies.

7) SEC Edgar
Sometimes you need to get your hands dirty and read through anual reports like 10-K or the quarterly 10-Qs or other SEC filings. Go directly to the SEC page and search by ticker.

Enough with financial data. There is more about companies than the numbers. I have mentioned two places already to get qualitative info. The morningstar and S&P analyst reports. But what if you want to read about the history of a company. You can find these at They are written by I find these excellent places to read about the long term history of a company especially if they are not too well know. For example if the company is Bank of America, then there are many places to get info. For a company like this, you will find multiple books written on the company. However, for a less well know company like Graco (GGG) might be the best place to go. Wikipedia usally just has the same Hoover's histories.

9) Guru Focus
This is a good site to find out where some of the world's best investors are putting their money. For example you might find out that Warren Buffet and Bill Miller both bought some stock which is now 20% lower than they paid. This may not lead you directly to riches but is still very useful info. If I am casually looking at a stock and I find out that a couple of these guys is buying it, then I might look into it in more detail. For example, seven of these value investing guru's have bough UPS. About 10 have bought Wal-Mart.