Educational Programming Video
The Value Line Investment Survey
Program 23: Summary & Index
In this session, we'll continue our discussion of the Summary & Index section of The Value Line Investment Survey. The Summary & Index is one of three parts of The Survey. The other two are Selection & Opinion and Ratings & Reports.
In the last session, we discussed the information contained in the first 23 pages of the Summary & Index. Now, we will review the material that begins on page 24.
At the top of page 24 is a list of INDUSTRIES IN ORDER OF TIMELINESS. The industries are ranked in order from best to worst. Number 1 is the best, number 92 is currently the worst. The number of industries we follow does change, and as a result the number of the lowest ranked industry also changes. When there is a significant change in an industry rank from one week to the next, that change is indicated by an up or down arrow.
Then, we show Noteworthy Stock Rank Changes, with a list of stocks moving up or down in Timeliness rank in the current week. Most of the rank changes shown here are caused by the announcement of new earnings reports. To see all the Timeliness changes in any one week, you must look for the up and down arrows in the Timeliness column next to the company names.
To digress slightly for a minute, any one stock's Timeliness rank will be affected by a number of factors, including the release of an earnings report, by whether those earnings were better or worse than expected, and by the momentum of its own stock. However, since there are always a fixed number of stocks ranked 1, 2, 4 and 5, a change in the Timeliness rank of one stock can have an impact on the rank of another, even if the other company had no new developments. If one company, for example, reports particularly good earnings, and its Timeliness rank rises from 2 to 1, some other stock's rank is going to have to fall from 1 to 2. We say that such a move in rank is the result of the "Dynamism of the Ranking System."
Next, we show Timely Stocks in Timely Industries. In this section, we show the Industries that are ranked highest for Timeliness, and we also show the stocks that are ranked number 1 or 2 in those industries. Value Line has long suggested that investors have diversified portfolios, which include stocks in a variety of diverse industries. This section is an excellent place to look for attractive stocks in diverse, but attractive, industries. To Value Line, by the way, "diverse" industries are ones that are affected by different things. The semiconductor equipment industry, for example, is highly dependent on the semiconductor industry, and they would not be considered diverse. Likewise, semiconductor industry is very dependent on the telecommunications industry, and they would probably not be considered diverse.
Most of the remaining pages in the Summary & Index contain a variety of stock screens, based on a wide variety of investment objectives. The first is a list of stocks ranked 1 for Timeliness, and the second is a list of stocks ranked 2 for Timeliness. Then there are two lists of Conservative Stocks, one with stocks ranked 1 for Safety and the other with stocks ranked 2 for Safety.
Next come screens for Highest Dividend Yielding Stocks, Stocks with High 3- to 5-Year Price Appreciation Potential, and the Biggest "Free Cash-Flow" Generators. Then, there are two screens, one for Best Performing Stocks in the past 13 weeks and the Worst Performing Stocks for the same period. These are followed by lists of stocks with the Widest Discounts from Book Value, stocks with the Lowest P/Es, and stocks with the Highest P/Es.
Other screens included in the Summary & Index are Stocks with the Highest Annual Total Returns, Stocks with Highest Projected 3- to 5-year Dividend Yield, High Returns on Total Capital, Bargain Basement Stocks, Stocks Ranked 5 (Lowest) for Timeliness, Highest Dividend Yielding non-utility Stocks, and Highest Growth Stocks.
The Highest Growth Stocks screen is a particularly interesting one. To be included, a company's annual growth of sales, cash flow, earnings, dividends, and book value must together have averaged 13% or more over the past 10 years and be expected to average at least 13% in the coming 3 to 5 years. To make this list, a company must have had reasonably balanced growth in a variety of areas, not just one, such as earnings or dividends, and Value Line's analyst must think that the company's growth will continue. For investors interested in so-called "growth stocks," this is a good place to find some.
That's the end of this session. Thanks for joining us, and be sure to visit www.valueline.com throughout the day for our ongoing commentary on the stock market, the economy, and on stocks in the news.
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. © 2013 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.