fundamental analysis

15 Jun: Stock market analysis

How do you analyze the stock market? What is the best website for stock analysis? What is the stock market doing today? Who is the best stock market analyst? Which stocks will go up in 2020? Can You trust stock analysts?

These are alll questios related to stock market analysis.

Stock market analysis techniques

How to make stock market analysis that is effective and trustworthy? There are several stock market analysis techniques. You can start how to analyze a stock by reading the latest stock market news. For effective stock market analysis tools, you can use mainly the fundamental analysis of stocks and the technical analysis os stocks.

The stock market analysis starts with the stock market today

How is the stock market today? You can buy a stock market analysis course, stock market analysis book, and visit stock market analysis websites. Our website is a stock market analysis website and we offer several stock market analysis services, a stock market newsletter and mentoring on trading and analyzing stocks to buy, stocks to sell, investing.

Stock market analysis tools

The fundamental analysis of stocks will focus on several financial ratios, P/E, PEG, liquidity ratios, leverage ratios, efficiency ratios, profitability ratios, market value ratios. The technical analysis will examine trends, charts, patterns, support, and resistance levels.

Stock market analysis is both chalelnging and interesting. Do not ignore the value of stock market analysis for making better risk-adjusted stock trading, stock investing.

20 Feb: Daily stock pick February 20 2020

Stock pick – Stock idea February 20 2020

Our daily stock pick, stock idea for today is American Airlines Group Inc. (AAL), with a close of 28.33 on February 19, 2020. This is not an investment recommendation, a stock to buy or a stock to sell, we will be mentioning daily a stock for further financial research and financial analysis.

American Airlines Group Inc (AAL) stock technical analysis

American Airlines Group Inc (AAL) stock daily chart
American Airlines Group Inc (AAL) stock daily chart

Stock market data : Finviz.com

American Airlines Group Inc (AAL) stock fundamental analysis

Key points about this daily stock pick:

  • P/E ratio 7.45
  • Forward P/E 4.88
  • PEG 0.72
  • P/S 0.28
  • P/B 78.69
  • Dividend 0.40
  • Dividend yield : 1.41%
  • Market cap: 12.79B
  • 5-year trend for revenue is slightly up
  • Net income increase for the past two consecutive years
  • EPS increase for the past two consecutive years
  • Inconsistent free cash flow for the 5-yr trend, negative for the FY 2017, FY 2018

Stock market data : Marketwatch.com

17 Feb: Fundamental analysis of stocks

Fundamental analysis in stock trading, stock investing

Fundamental analysis. Wikipedia explains what is fundamental analysis.

Fundamental analysis, in accounting and finance, is the analysis of a business’s financial statements (usually to analyze the business’s assetsliabilities, and earnings); health;[1] and competitors and markets. It also considers the overall state of the economy and factors including interest rates, production, earnings, employment, GDP, housing, manufacturing and management. There are two basic approaches that can be used: bottom up analysis and top down analysis.[2] These terms are used to distinguish such analysis from other types of investment analysis, such as quantitative and technical

Source: Wikipedia

“Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts. There are several possible objectives:

  • to conduct a company stock valuation and predict its probable price evolution;
  • to make a projection on its business performance;
  • to evaluate its management and make internal business decisions and/or to calculate its credit risk.
  • to find out the intrinsic value of the share.” , Source: Wikipedia

Stock Trading: How to Use Fundamental Analysis

A nice article about why use Fundamental Analysis.

” Understanding fundamental analysis is necessary to determine whether a stock is valued correctly in the market. Analysts typically look at macro and micro factors to identify stocks that are trading at higher and lower prices. If a stock isn’t priced correctly, it could be worth more money and turn a higher profit. This is especially true when a stock is undervalued. “, Source: https://thetokenist.io/fundamental-analysis-stocks/

Fundamental analysis and stock investing

Fundamental analysis is very important about stock trading, stock investing, choose stocks to buy, stocks to sell. Yes it takes time to make due diligence and perform fundamental analysis of stocks. But it is worth it. Because you trade stocks with confidence, based on their fundamental strengths or weaknesses. The stock market ofthen ignores the fundamental analysis and trends based on technical analysis. This is stock market investing that is too risky. Stock market trading should always focus on fundamental analysis of stocks.

15 Nov: TIME INC NEW COM Fundamental Analysis

TIME INC NEW COM Fundamental Analysis
Name: TIME INC NEW COM
Symbol: NYSE: TIME
Sector: Consumer Discretionary
Industry: Publishing

Business Summary:

Time Inc. is a media company. The company has several well-known publications and provides content marketing, targeted local print and digital advertising programs, branded book publishing, and marketing and support services, including subscription sales services for magazines and other products, retail distribution and marketing services, and customer service and fulfillment services, for the company and third-party clients, including other magazine publishers.
Key Information:
Stock price close on 14th November 2016: $13.70
Market Cap 1.36B
Beta N/A
PE Ratio (TTM) -15.15
52 Week Range 12.23 – 17.66
Dividend & Yield 0.76 (5.80%)

Fundamental Analysis:

We will have a 5 year financial analysis of important fundamental metrics such as revenues, profit margins, net income, earnings per share, cash flow and balance sheet, examining years 2011 to 2015.Starting with revenues first thing we notice is a steady 5 year decline in revenues growth. For each of the last 5 years the company has made less sales compared to previous years. So we have a 5 year negative growth rate for revenues. Current sales growth for year 2015 is -5.43%. What is remarkable is the fact that gross margin shows a stability for the 5 years period, currently at +60.72% having a range of +62.12%/+60.72%. But net margin shows a different story. It has followed the same path as sales, declining for each of the last 5 years ranging from +10.01% during 2011, the highest piece to -28.39% for year 2015, which is the lowest for the 5 year range.
Net income after taxes shows a declining trend for the last 5 years ranging from +368 millions in 2011, the highest point to our range to -881 millions in 2015, the lowest point of reference. Diluted normalized EPS show a steady declining trend for the 5 years period ranging from 3.54 the highest price in the range in 2011, to -1.72 in 2015, the lowest point in the range. Cash flow analysis shows that cash from operating activities remain positive for each of the 5 years, but still showing a declining trend, ranging from 474 millions in 2011,the highest point in our range to 154 millions in year 2015, the lowest point in the range. Free cash flow follows the same trend as operating cash flow, a declining trend from 426 millions in 2011, the highest point in our range to -58 millions for year 2015, the lowest point to the range. And also turned negative from positive.

Balance Sheet:
What we can notice for the 5 years analysis are the following. A decrease of total assets and total equity, an increase of total liabilities and mainly a huge increase in total debt ranging from 34 millions in 2011, the lowest point in our range to 1,293 millions in year 2015, the highest point in the range. Current ratio for year 2015 is 1.26 and quick ratio is 1.23, both above 1 which is considered as a safe ratio but most importantly also both ratios are currently at the highest price for the 5 years range. Debt/Equity ratio has skyrocketed the last 5 years and is currently at 0.7178, the highest point in the time range but still below the price of 1, again considered safe.

Relative value analysis:
Comparing the Net Profit Margin, Return on Equity, Interest Coverage ratios we notice that TIME INC NEW Com has lower ratios than the industry ratios. Price to cash flow ratio is also higher for the company compared to the ratio of the industry. However the company has a higher dividend yield than the dividend yield of the industry.

Growth prospects:
The company has a current PEG ratio of 2.21 and estimated earnings growth for next 3-5 years of 5%.During last 4 quarters the stock has only one positive earnings surprise and the consensus for earnings in year 2017 has been in decline.

Technical Analysis:

TIME stock price
TIME stock price

The stock has been recently in a downtrend and current price of $13.70 is blow moving averages of 50 days and 200 days, currently at 13.83 and 14.58 respectively. However the stock has made a recent bounce from low price range of about $12.5 per share, while momentum indicators such as MACD,Stochastics and RSI show bullish momentum and are not at extreme levels.

Conclusion:
We strongly believe that unless a radical financial improvement happens our recommendation is to avoid buying the stock. In fact we favor selling the stock at any strong rally as very poor financial performance and a technical analysis that shows the stock is still in downtrend does not give us any strong argument to buy the stock.

Legal disclaimer and sources:
The author has not any current shares of the stock in his portfolio or intends to buy, sell any stocks of the company in the near future. This is an independent financial analysis with not any financial compensation from any source. Sources used are investools.com, zacks.com, stockcharts.com and yahoo finance.