This instablog looks at the five example Western utilities covered in part two. This instablog will primarily look at valuation through the lens of FAST Graphs™. We consider this powerful graphing tool an essential first step when attempting to determine both fair value and the potential return that a common stock offers. However, they are not the final step. Instead, they provide a very efficient mechanism that allows the user to determine whether they want to embark on a more comprehensive research effort or not. Consequently, they can save the user from wasting a lot of unnecessary time and effort towards a lost cause.
FAST Graphs™ are a “tool to think with” and as such, have no agenda of their own. Instead, they are designed to provide “essential fundamentals at a glance” and allow the user to interpret the data according to their own philosophies, strategies and beliefs. In this context, FAST Graphs™ are the deliverer or reporter of important information.
Essentially, the FAST Graphs™ stock research tool provides investors many benefits, but there are four things they do very well.
- 1. They provide a historical review and instantaneous perspective of how well the business behind the stock has historically performed (the orange earnings justified valuation line).
- 2. They provide an instantaneous perspective of how the market has historically capitalized or priced the company’s operating results or business performance (the blue normal PE ratio line).
- 3. They provide a precise consensus estimate of leading analysts’ near term earnings expectations for a company’s current fiscal year and next fiscal year followed by a five year earnings growth consensus estimate (estimated earnings and return calculator graph).
- 4. They provide the opportunity to override and therefore input the user’s own estimates or expectations of the company’s future prospects (override function is located on navigation bar).
FAST Graphs™ are a dynamic tool that calculates the company’s changing growth rates each time a different time period is selected. Therefore, the user can determine such things as whether the company’s earnings growth rates are accelerating, decelerating or staying the same, and see major inflection points, if any, with a company’s business vividly revealed. This is a major component of the “tools to think with” aspect of this fundamental research tool.
Non-subscribers to FAST Graphs™ can click on the Table below to take you to a free link to live, and fully functioning FAST Graphs™ on the companies discussed in this Instablog. (Subscribers may want to go directly to the FAST Graphs™ website). Click on any stock symbol on the table to run this "tool to think with" through its paces. Draw graphs displaying 2 to 20 years of history. The tan vertical navigation bar on the left drives this dynamic graphing tool. The drop-down window at the top with the stock symbols has a black arrow that allows you to move from one company to the next. Discover how this tool dynamically re-evaluates valuation based on the company's earnings and price relationship.) This link will stay active for 90 days from the date of this article.
Summary & Conclusions
Once you are in the free link to the companies covered in this Instablog, you will be able to fully experience the FAST Graphs™ premium charting tool limited to these companies only. The tan navigation bar to the left allows you to manipulate each company’s graphs in numerous ways. There are boxes with checkmarks in them that could be unchecked that allow you temporarily add or delete any function that FAST Graphs™ offers. Play with these free sample graphs and have fun.
Disclosure: No positions at the time of writing.Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.
This article was written by Chuck Carnevale. If you enjoyed this article, please check out our research articles.