- Investment strategies
- Why invest in the stock market?
- Buy and hold or technical analysis? Why you need an investment plan
- Value investing and short selling in volatile markets
- Using technical analysis to support value investing
- Investing in the unexpected
- Franking credits, explained
- What is dividend stripping and is it a sensible strategy?
- Investing in quality IPOs
- How to invest in stocks that benefit from a moving Australian dollar
- Reasons to avoid bonds when interest rates are low
- How value investors use Skaffold
- Quality, growth and value = a winning strategy
- Know your investor type and boost your performance
- Technical + fundamental analysis = better buy and sell decisions
- Fundamental investing
- Value investing and the price earnings ratio
- Intrinsic valuation models and methodology
- Value investments or value traps?
- How to find value stocks in a bull market
- Find value investments in expanding markets
- Why capital raisings struggle to add investment value
- How to value an insurance company
- Top stocks
- 5 qualities of top stocks
- How to find stocks with a competitive advantage
- Why return on equity is the best measure of business performance
- Using cash flow to find value investments
- Finding high quality dividend stocks
- Debt is not always a dirty word
- Why Skaffold share investment software makes sense
- Using economic factors to uncover the best investment options
- How do experts find top stocks to invest in?
- Investing in global stocks
- How to invest in international shares on global stock markets
- Benefits of investing in international shares
Why Skaffold share investment software makes sense
Skaffold’s share research software can help you make sense of all the available market information and invest in the right stocks.
Investing can be a daunting task. In today’s world we have a wealth of information and share investment software packages at our fingertips, but sifting through that information and focusing on what really matters is where the challenge lies.
Whether you’re managing your SMSF to prepare for your retirement or trying to build a nest egg for the present, you want to catch the best opportunities and avoid disasters.
How do you find the best stocks to invest in?
There are thousands of stocks listed on hundreds of stock exchanges all around the world.
Every investor develops methods to narrow down the universe of investment opportunities to a group of just the best stocks. Often we use rules of thumb. We may eliminate entire markets or sectors based on a premise like ‘I don’t like resource stocks’, or ‘I don’t understand technology businesses.’ Other investors determine their universe based on advice from a tip sheet, share investment software, adviser or other source.
All of these methods for finding stocks to invest in are legitimate, but they are not scientific and are likely to result in a lot of good investment opportunities being overlooked.
Skaffold was built to circumvent this problem. Within 4 or 5 mouse clicks Skaffold members can narrow the entire universe of stocks down to a group of 5 to 20 of the very best stocks to invest in.
Most importantly, this is not a simple filter that relies purely on historical data. Skaffold looks forward and presents forecast data including forecast intrinsic values – over the next three years. This gives you a powerful advantage.
Warren Buffett once said, “The speed with which business success is recognised is irrelevant, provided the intrinsic value of a company is rising at a satisfactory rate.”
Save time, use Skaffold share investment software
By utilising technology such as Skaffold, rather than manually sifting through hundreds of annual reports, value investors can quickly weed out the rubbish and focus on the few top stocks that meet their personally defined set of sensible and rational criteria.
Skaffold was built to provide complete coverage for every stock listed on every stock exchange around the world.
Skaffold share investment software is fully automated, which ensures its breadth and depth of stock research and analysis is not limited by the physical capacity of a team of analysts. Nor is it influenced by their biases or affected by their errors.
This automation not only enables complete coverage of every listed stock, it also means that during periods of market inefficiency, such as bi-annual reporting seasons when analysts are struggling to keep up with the hundreds of companies reporting each week, investors can rely on modern technology to sift through the updated information quickly and accurately and quickly pounce on new investment opportunities.
Instead of digging through mountains of useless fundamental data, more time can be spent understanding those companies that have risen to the top. Skaffold uses a vast array of financial information to analyse a company and then present the findings in an easy-to-digest and visually engaging format. While Skaffold is simple to use and understand, the processes that take the data and present it are anything but simple.
The conclusions that Skaffold draws about a business are presented succinctly, and in such a way that investors can quickly assess the risks associated with the output.
At the end of the day, any tool, newsletter, or analyst that provides an opinion about a stock is providing an opinion about the future. The future is inherently uncertain so it is important to interpret the opinion in that light.
The best investments are also those whose futures are less likely to be subject to unexpected shocks. Those companies with a long-term demonstrated track record of success and with stable economics have a much better chance of surviving and taking advantage of those shocks.
Wouldn’t you prefer to know well ahead of time that a company is at significant risk of catastrophe? When Gunns (GNS) collapsed in 2012, investors lost $1.4 billion. Losses were also accrued by long term shareholders at Elders, Hastie Group and Becton. In each case, Skaffold warned investors many years before that the quality of these companies was simply not investment grade.
The chart below shows that as far back as 2005 Gunns was below investment grade, and by 2008 had become a high risk situation.
Use the past as a guide for the future
One guide to the future opportunities for a business is most certainly the past. Do you really believe that the economics of running an airline in the next few years is going to be materially different to the last ten, or that the billions that have been lost by international air carriers over the last decade will turn magically into a purple patch?
If a business has sound economics and is well run, then there can be a reasonable expectation of continuance. The opposite is also true. But the past is only ever a guide and there are many reasons why the future may not resemble the past.
Research the company’s future opportunities
Skaffold uses professional and rated consensus analyst forecasts as one of the inputs to its intrinsic value and other metrics and ratios. In the case of some Australian companies, up to 30 institutional analysts from banks and stock broking companies are forecasting the earnings per share aggregated and available in Skaffold.
A range of estimates is also provided so as to show the level of agreement in the analyst community, as well as the number of analysts covering each stock.
Skaffold calculates an intrinsic value range
The final piece to the puzzle is the safety margin – the difference between a company’s intrinsic value and current share price.
Intrinsic value calculations are only ever an estimate, so it makes sense to apply a safety margin to the intrinsic valuation to allow for uncertainty.
Value investors aim to invest in high quality companies that are growing their intrinsic value and trading at a price below that intrinsic value estimate. Warren Buffett famously said that in the long run share prices tend to follow value. Buy a growth stock at a positive safety margin and your share portfolio should perform quite well.
While not every investment will be a winner, and not every opportunity will be caught, by avoiding the time bombs and finding the otherwise hidden investment opportunities, overall your portfolio should prosper.
Skaffold’s powerful filter and in-depth yet intuitive stock research does all the laborious stock analysis for you. Your job as an investor is to simply focus on understanding the best investment opportunities and acquiring shares in those businesses at an attractive safety margin.