Getting to know Financial Databases: Part 1
18 Nov, 2011
I know what you’re thinking: LIBRARY!. So today I’m going to spice it up a bit and tell you how the library can make you MONEY (well….not entirely true…the making of the money is up to you but we can help get you some information). This is part one of a series on lifting the veil of mystery off some of our financial databases.
Lots of you already know Bloomberg. It has the double-screen monitor and fancy keyboard staring at you from the other side of the Sandiford lab. Bloomberg is the pretty cheerleader of our financial databases—everyone knows it and everyone wants to get to know it better (if this were high school, Bloomberg already has a date to the prom). Today however I wanted to highlight one of our financial wallflowers: S&P Netadvantage
Produced by Standard & Poor’s (known for their ratings, particularly recently with downgrade of the United States’ bond rating), Netadvantage contains US industry briefings and directory of executives but more importantly for us today, stock reports on publicly-traded companies. Much like S&P gave the United States a rating based on their ability to repay their debts, they also provide ratings (from one to five starts) for companies based on their ability to pay strong dividends. This rating is contained on a cheat sheet that breaks down the company’s main financials, dividend data and stock performance over the last couple of years.
Attached to a company report are links to analysis of that industry as a whole. So if you’re looking at Bombardier’s company report, you can easily tab over to the analysis of Aerospace & Defense. The industry report might provide helpful insights into why a company’s rating is good (or bad).
Speaking of bonds, S&P Netadvantage contains a bond screener. This will allow you to screen for corporate bonds according to rating, maturity date, sales price, current yield etc.
Before you get too excited and start buying up stocks based on S&P ratings, recently there’s been some disenchantment with the notion of stock ratings. There are several recent studies, including one by the McKinsey group, that argue analysts are generally too bullish in their estimation of a stock’s worth. However I think Jason Kirby in his recent Maclean’s article sums it up well that: “For all their faults, analysts can tap information regular investors could never get, such as access to management at companies. So there is value in the recommendations of analysts, but it needs to be viewed with an understanding of their weaknesses.” Consider yourselves cautioned.
The breakdown for S&P Netadvantage:
What: Database providing overview, brief analysis and stock rating for public companies.
Why: See how your stocks are rated and get more information on the company and its industry.
How: Enter the database and click the ‘Company’ tab. Enter in either the name or ticker of the company you wish to search. Click “Stock reports” to see the rating and overview.