Educational Programming Video
The Value Line Investment Survey
Program 21: Industry Reports
In this session, we are going to discuss the Industry pages included in each Edition of The Value Line Investment Survey.
There are approximately 1,700 companies followed in The Value Line Investment Survey, and those companies are organized alphabetically, by industry. That is, all the companies in any one industry are located together and arranged alphabetically within the industry. The location of an industry can be found by looking at the front page of the Summary & Index. At the beginning of each industry grouping is a one- or two-page Industry Report.
The Industry Reports are designed to provide investors with information about the current condition and future prospects of each respective industry. They include a lengthy commentary about the industry, a financial composite containing income and balance-sheet statistics for recent years and forecasts for the current year, the next year, and the period out 3 to 5 years, an Industry Timeliness rank, and a relative strength stock price chart.
The written commentary can vary considerably from one industry to another, but it generally contains a summary of important developments, a more detailed description of those developments and the prospects for the industry, and some discussion of the attractiveness of the stocks in the industry. Our security analysts have considerable leeway in determining just what to include, but they will usually focus on current operating results, major developments affecting the companies, including the competitive situation, and prospects for sales and earnings in the coming few years. Other topics that might be included are new product developments, the competitive situation both in the U.S. and abroad, pricing, and the labor situation.
A table containing Composite Statistics normally appears in the lower left of the report. The financial items appearing here are the same ones that are in the lower half of the Statistical Array in each company report, and the numbers are, in fact, a composite of all the information on the individual companies in the industry.
Using this table, you can easily see the recent trends and expected future performance of an industry, and you can compare the performance of any one company in the industry with the industry as a whole. You can easily determine, for example, whether or not the net profit margin or the return on shareholders' equity of one company is better than, about the same as, or below that of the industry.
In the upper right hand portion of each page, we show the INDUSTRY TIMELINESS rank. This rank, which also appears each week on the front cover of Selection & Opinion, is calculated by averaging the Timeliness ranks of each of the stocks that have been assigned a Timeliness rank in a particular industry. The industries are then ranked in order from the best to the worst. Number 1 is the best and 92 is currently the worst. The total number of industries included in The Survey does change from time to time, and as a result the lowest number in the future may well be something other than 92. The Industry ranks are also published on page 24 of the Summary & Index, where they appear in order of Timeliness. Significant weekly changes in ranks are also noted on page 24, where they are indicated by arrows pointing up or down.
Finally, in the lower right hand portion of each Industry page is a relative strength industry price chart. This chart shows the performance of all the stocks in an industry relative to the entire universe of stocks in The Value Line Investment Survey. When the relative strength line is rising, it means that the stocks in the industry are acting better than the broad market; when the line is falling, it means that the stocks are acting worse.
That's the end of our discussion of an Industry Report. Thanks for joining us. Please be sure to visit www.valueline.com every day to see our most recent comments about the stock market and the economy and about developments on specific stocks.
Factual material is obtained from sources believed to be reliable, but the publisher is not responsible for any errors or omissions, or for the results of actions taken based on information contained herein. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. © 2016 Value Line Publishing, Inc. RIGHTS OF REPRODUCTION AND DISTRIBUTION ARE RESERVED TO THE PUBLISHER. The Publisher does not give investment advice or act as an investment adviser. Value Line, Inc., its subsidiaries, its parent corporation and its subsidiaries, and their officers, directors or employees as well as certain investment companies or investment advisory accounts for which Value Line, Inc. acts as investment advisor, may own stocks that are mentioned on this Value Line Web site.