I received one of those letters yesterday from Ivy K. who wrote with some questions of her own:
"Hi Bob! My name is Ivy K., 26 year old nursing student in Las Vegas, NV. I'm a complete newbie in the world of stock market investing. I joined CNBC.com's Portfolio challenge this morning. I'm writing because I need some advice on how to to search / research for good stocks. I read your June 23, 2008 article about FLUOR and why it's a good pick. Where did you get the news about their earnings and etc?
Also, I picked the following stocks for my virtual online portfolio and if you have the time, could you pls give me some advice on them? They are :
1.) VeraSun Energy Corp -- I chose this because alternative energy is always on the news even on CNN.
2.) Estee Lauder -- My sister and mom are loyal to Aveda, which was purchased by Estee Lauder. Plus, it was featured in MSNBC's Business of Innovation because it's a socially responsible company and that's something that I admire. Plus, that show also mentioned that their profits are rising.
3.) Waste Management -- I really believe that this kind of company can help with global warming.
4.) Whole Foods Market -- My teacher and other classmates do their groceries here and in the entertainment news, I see a lot of celebrities doing their groceries here. I figured if the celebrities are doing it, pretty soon other people will be doing it.
Finally, I go to reuters.com's finance section because they have analyst recommendations on whether to sell, hold or buy.
This is a long email and I really appreciate the time you've taken to read and hopefully, respond.
Yours,
Ivy"
Ivy, thank you so much for writing!
I am glad that you enjoyed my write-up on Fluor (FLR), and my explanation of why I believe it is a good "pick". Let me try and answer your questions in order.
You first asked me about "where I got my information on the earnings, etc.?" That's easy. I am a big fan of Yahoo Finance (and no I don't own any shares in Yahoo!). All you need to do is enter the symbol of the company that you wish to investigate into the box next to the "get quotes" button and you will get company-specific information.
For instance, let's use Verasun Energy (which after entering the name in the box I see that the symbol is VSE).
I generally find the logo by first going to the homepage for the company. Virtually every company has a homepage on the internet. To get the location, you can go over to the Yahoo "Profile" for VSE.
HERE is the hompage for VSE if you are interested :).
Also on the "Profile page" from Yahoo is a description of the company:
"VeraSun Energy Corporation engages in the production and sale of ethanol and its co-products in the United States. Ethanol is primarily used as a blend component in the gasoline fuel market. The company's ethanol co-products include wet and dry distiller grains with solubles, which are used as animal feed; and corn oil that is used as an animal feed, as well as to produce biodiesel. It also markets VE85, an ethanol blended fuel through arrangements with gas distributors and retailers."
So now we can see that this particular company, that I have not been previously familiar with, is involved in ethanol production. Certainly this has been a very 'hot' area in the stock market.
There isn't anything wrong with buying a 'trendy' kind of stock. In fact, you could ride the obvious positive sentiment which may work out to price momentum hopefully to the upside. This isn't particularly my approach--but there are many ways to select stock and this might work for you!
But my own next step in looking at a stock is to check out the latest quarterly report. From my perspective, I am looking for companies that are growing their revenue, increasing their earnings, possibly beating guidance, and hopefully raising expectations. O.K. that's a lot to ask from a quarterly report, but remember that we cannot expect to buy every stock.
By the way, I do NOT own any shares of VSE nor do I have any options.
If we look down the left side of that "Profile Page on Yahoo" we can see the "Headlines" link.
