What do Warren Buffett, Charlie Munger, and Peter Lynch have in common (besides three of the greatest investment records in the history of global capitalism)? They have spoken about their admiration for one of the best investment products available on the market: the Value Line Investment Survey.
The Value Line Investment Survey
If you're a new investor, it's likely you've read about or heard someone mention the Value Line Investment Survey. Value Line's flagship newsletter tracks 1,700 individual stocks across more than 90 different industries. Each week, the Value Line staff analysts update a batch of 130 stocks. How you receive the updates depends on whether you choose the digital or print option.
Value Line's impressive one-page reports include a tremendous amount of financial data, including:
- Gross profits
- Operating profits
- Tax rates
- Shares outstanding
- Return on equity
- Return on invested capital
- Debt-to-equity ratios
- Average price-to-earnings ratios over time
- Dividend yields
- Payout ratios
- Management ownership
This allows you to get an idea of the trends facing the business. For example, are profit margins being squeezed? If so, you could try to figure out if the problem is temporary or permanent, which would have a significant influence on your valuation.
Other Value Line Resources and Products
There are numerous other Value Line products apart from the legendary investment survey. These include the small- and mid-cap edition, mutual fund edition, selection and opinion edition, options edition, and ETF edition. For new investors, these might not be a good fit unless you have specialized knowledge or a particular interest.
Why Subscribe to the Value Line Investment Survey?
For new and experienced investors alike (not to mention business students and managers), the Value Line Investment Survey can be a great resource. You can understand a business by looking at its numbers. You can see the things that cause it to be a good business or a struggling one. You can see how effectively capital has been returned to owners and how the stock was valued in the past compared to the present. You can see what makes owning a food stock different from owning a travel stock.
The Value Line Investment Survey can help you reduce investment risk. It can show you in a few seconds whether a firm tends to generate huge losses during recessions and whether the interest coverage ratio is large enough to make you feel comfortable investing in bonds from the issuer. Even if you invest in index funds, you can go through the S&P 500 components to understand what you actually own.
How to Access the Value Line Investment Survey for Free
For new investors, putting aside as much cash as possible into their investment accounts is both wise and prudent. Many community libraries have professional subscriptions to the Value Line Investment Survey, including the online database, so you can run stock screens or put together your own collection of summary sheets to print and study at home.
Libraries typically make this available for free to members. Since Value Line Investment Survey subscriptions cost hundreds of dollars per year, this is an excellent option for those without the money to spare, but who still want to conduct investment research.