Reading financials after TA

[shyguy]

hi,

im reasonably confident with TA but havent researched much into fundamental analysis. on short term trades what, if any, would be the basics you would look at in the fundamentals? any examples would be greatly appreciated!

 

[burglar]

hi,

im reasonably confident with TA but havent researched much into fundamental analysis. on short term trades what, if any, would be the basics you would look at in the fundamentals? any examples would be greatly appreciated!

You would not want to buy into a company which is trading insolvent, then goes into trading halt.

I would want to have estimate of a company's debt and its ability to repay it.
Enough cash in the bank to meet its annual cash burn.

Me, ...
I would read a quarterly report.
I would look at a ten year chart.
If it got through the GFC (August 2008) and its internal problems - that is a minimum for me.

 

[Boggo]

im reasonably confident with TA but havent researched much into fundamental analysis. on short term trades what, if any, would be the basics you would look at in the fundamentals? any examples would be greatly appreciated!

I do the opposite of what your header implies, I produce a list of stocks and then apply TA.

I use StockDoctor with my SMSF, they do all the funnymental stuff better than I ever could.
Within the StockDoctor software you have the ability to set any filter parameters and from that you can produce a .csv file of all the stocks that meet your criteria.

I save the contents of the .csv to a text file which I then use in the Premium Data software. This gives me a separate group of stocks (currently 482 total) that I then run through my Metastock scan.
From there I eyeball any pop ups from a weekly and daily view. It seems to work well, currently in double digit profit this FY with some assistance from a bit of leveridge via Instalment Warrants on stocks such as TLS etc.

For me from an investing approach in my SMSF narrowing the field with StockDoctor keeps me away from the potentially risky stocks and it well and truly earns its annual fee.
(Note that I have no association with Lincoln StockDoctor other than as a happy client)

 

[shyguy]

You would not want to buy into a company which is trading insolvent, then goes into trading halt.

I would want to have estimate of a company's debt and its ability to repay it.
Enough cash in the bank to meet its annual cash burn.

Me, ...
I would read a quarterly report.
I would look at a ten year chart.
If it got through the GFC (August 2008) and its internal problems - that is a minimum for me.

what would you take from the most recent quarterly report for bgs?
http://www.asx.com.au/asxpdf/20141031/pdf/42tcn9l37xk41t.pdf

I use StockDoctor with my SMSF, they do all the funnymental stuff better than I ever could.

looks good but not looking to invest in more services/tools at the moment.

 

[Triathlete]

Hi Shyguy..
Here is the fundamental view as per stock doctors assessment:
BGS exhibits unacceptable levels of financial risk due to a below benchmark financial health score. Investors need to be aware such companies pose risks and warrant a SPECULATIVE investment only. Any prospective investment should be managed with tight stop losses implemented.

Also looking at their chart shows it to be a highly illiquid stock and in a downtrend presently.
I personally would not touch it ....maybe this is a speccy for you?

 

[Julia]

I do the opposite of what your header implies, I produce a list of stocks and then apply TA.

+1. I'll only have any interest in what a stock is doing technically if I'm confident it's fundamentally sound. That does not include micro-analysing it.

 

[Boggo]

what would you take from the most recent quarterly report for bgs?

looks good but not looking to invest in more services/tools at the moment.

I know which one would be the better investment option

 

[shyguy]

I know which one would be the better investment option

fair enough, but at this point my goal is to better understand how to read these fundamental statements.

 

[Boggo]

fair enough, but at this point my goal is to better understand how to read these fundamental statements.

Yep, understood shyguy.

From what I have seen you need to be able to correlate a backlog of reports to get an idea as to whether there is a change in the fundamental trend or as is the case a lot of sound stocks may have reached their value and will start to plateau even though the chart shows a strong trend and new potential breakout.

I haven't done it for a while but I have had a look at stocks where the tech/a volume identification of sellers often occurred around or just above the fundamental "fair value" price of a stock.

I am often amused when I see commentary on here regarding the latest company report without looking at where the price is and what the longer period trend is to this point.

I really don't think that the average individual can accurately make an investment decision on a stock unless they are intimately aware of all its issues and to do this would take way too much time and would just be a distraction from seeing better opportunities while next years asx 200 candidates are in the formative stage.

What seems to be the case is that two ends of the market use fundamentals, the new punter starting out who picks one paragraph or number from one report, often looking for something to justify why he should either buy a bottom dweller or worse still, justify why he/she is hanging on to a loss maker.
The other end of the scale is the large insto who know when to start offloading to the new punter and this is usually happens after a long term uptrend in price.

(The poor man always pays twice - anon)

Just my

 

[burglar]

what would you take from the most recent quarterly report for bgs?

Item 1.13 the quarter's cash burn ($447) and Item 1.22 cash in bank $1.706

Enough cash in bank to see them operating another year.
I would guess they are not going belly up in the short term.

A lot of shares on issue ...

The quarterly activities report shows significant results for the Viper Prospect.

The ten year chart shows that they survived the GFC.
But it shows a disturbingly long downtrend.
This period is likely the reason why there are so many shares on issue.
A deeper search will, no doubt, show numerous Capital Raisings
with accompanying dilution of shareholder value.





Three month chart:




Why did you choose this particular example?
Just interested!

 

[shyguy]

Why did you choose this particular example?
Just interested!

only just got back into the shares and this was one i bought too early...

 

[tech/a]

I'm with BOGGO and burglar

Why would you look at this technically?
Surely it would have filtered it OUT as
A prospect.

 

[The Bear]

Hi,

Being a newbie to the game myself I'm still learning too.

As everyone as already said previously in this thread fundamentally and technically this stock not good.

It's a specy and since it's in mining exploration it isn't making any money from operations (profit and cash flow). It's funded all it's actives by raising capital through shareholder equity by a lot over the years. Hence it has little debt on the books....

Technically it's just tanked since the GFC and is now on the floor. I've noticed it has alot more liquidity that most other stocks around this price.

I personally don't know much about this stock so not sure if they have striked lucky and are about to develop a new mine etc

I find the google stock screener a good place to start to quickly narrow down your universe of stocks to then do more research.
https://www.google.com/finance?ei=1vatVIHxBIjFkAW3k4DoCg#stockscreener

Look for companies that have little debt, positive cash flow, profits, interest cover so they can pay of their debts if needed, also I've found having a little back ground on what the company does etc....helps.

Also drilling down through the the cash flow & income statements + balance sheet in google finance or yahoo finance can save you time. If you want to look more into these figures then download their financial statements as these will be more accurate.

Also to learn more about reading financial statements try the book "financial statements demystified" if you google it you should find it.

Good Luck!

TB