Stock Analysis Process

Note: In order to use this software, it is very important that you understand the methodology and process used by stock clubs to analyze a potential investment. The Stock Investment Guide is a tool, but human judgement by you (the user) greatly impacts the analysis results. The following is not meant to be an in-depth tutorial. Rather, the following steps explain the basics of using SIG. Churr Software is not responsible for your investment decisions nor the stock data used to populate the software.

How to complete a Stock Investment Guide (SIG) analysis.

The steps are fairly simple to complete the Stock Investment Guide. The key to successful stock analysis is the judgment used to select "reasonable" values. The SIG is a GUIDE to help stock clubs and investors find attractive investments at reasonable prices.

The Stock Investment Guide does not provide investment advice. The suitability of any investment can't be determined by this software, but must be determined by you.

Completing an Analysis

An updated tutorial is available on the Churr Software website if you want a more detailed understanding of the analysis used by stock clubs. The following provides the basic steps of completing an analysis in SIG.

1. The first step of completing a stock analysis is to enter the raw stock data into the software. There are currently three ways to enter the data:
a. Enter the data by typing the appropriate information on the COMPANY DATA tab.
b. Open an existing .ssg data file that you previously saved to your hard disk, such as data files from Stock Central.
c. Download a .ssg file from the NAIC Stock Data Service by entering the stock symbol in the ticker symbol field and pressing the Fetch SSG button. (You must subscribe to the NAIC premium service for this feature.) You may also use the free data gathered from the internet by going to SIG's preferences and selecting the "Use Free Data" option.

2. Click the GRAPH tab. Examine the sales, pretax income, earnings per share, cash flow per share, and yearly high and low stock prices. Click on the year labels (x-axis) to remove any outliers from the graph. Enter your selection for the estimated sales and earnings growth for the next five years. For your convenience, the Standard and Poors ACE Five Year Estimate is displayed if you imported an SSG data file from Better Investing. These growth estimates are by the securities analysts that created the data, and should not be considered as investment advice. You should use the growth estimate and another source of data to consider as you select YOUR estimated growth rates.

Options for the Graph (Available in the Graph Menu)

3. Many stock club members limit their projected growth rates for the sales and earnings to a maximum of 15%, since a company has a difficult time sustaining very large growth rates for many years. Your selection of the growth rates is a key factor in the stock analysis calculations.

4. Click the ANALYSIS tab. Examine the PE ratios. You can omit a year from calculations by clicking on the year label in the data tables. You can change the projected high price by changing the projected High PE ratio and the projected EPS. Your cursor will display as a check mark when the mouse cursor is over an editable entry.

5. Check your projected HIGH Price. Enter your estimate for the projected LOW price.

6. Review you results. Are your judgments reasonable? Save your data file and print your report.

7. The Performance Tab will provide further insight to the performance of the company being studied. Comparisons of the quarterly and trailing four quarters growth in sales, pretax profit, and earnings-per-share are plotted on the graphs. Use the print command to print the Company Performance Analysis report.

8. The Web Tab provides instant links to company research information around the Internet. You can check company financials, earnings estimates, competition, company news, and much more.

9. The Reports Tab will allow you to simply print the various reports available from the Stock Investment Guide.