Value Line Investment Survey
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 heard someone mention or read about the Value Line Investment Survey. The flagship newsletter tracks 1,700 individual stocks across over ninety 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 web option or the print version.
Value Line's impressive one-page reports include a tremendous amount of financial data including sales, 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, and much, much more.
This allows you to get an idea of the trends facing the business – are margins being squeezed? If so, you could try to figure out if the problem is temporary or permanent as that would have a big influence on your valuation. You can download free versions of the 30 stocks in the Dow Jones Industrial Average from the Value Line website to give you an idea of how the product could work for you and your investment analysis.
How Much the Value Line Investment Survey Costs
The print version is a little more expensive than the online but you can sign up for a 13 week trial for between $65 and $75 and an annual subscription for $598 for one year or $1,395 for a three-year subscription to save a good deal of money. You might want to check with your accountant because it’s possible that some or all of the expense might be tax deductible. Once you've been a subscriber for a while, you can almost always negotiate (or wait for a sale) a renewal rate of $299.
Other Value Line Resources and Products
There are numerous other Value Line products aside from the legendary Investment Survey. These include the Small and Mid-Cap Edition, mutual fund edition, options, convertibles, et cetera. For new investors, these don’t make a lot of sense unless you have specialized knowledge or a particular interest.
Reasons You Should Consider Buying a Value Line Investment Survey Subscription
Keep in mind that, personally, I have no affiliation with the company that publishes the product other than being a long-time customer. This recommendation is entirely unbiased as I have no incentive, in any capacity, to recommend the Value Line Investment Survey but I do so, nevertheless, wholeheartedly.
For new and experienced investors alike (not to mention business students and managers), it can be a great resource if you are interested in actually getting to understand some of the numbers that matter most when valuing a stock.
By looking at a business through the numbers, you can come to understand it. You can see the things that cause it to be a good business or a terrible business. You can see how effectively capital has been returned to owners; how richly valued the stock was in the past compared to the present. You can see, right there on the page, what makes owning a stock like McCormick so different from Carnival.
The Value Line Investment Survey can help you reduce investment risk by showing you in a few seconds whether a firm tends to generate huge losses during recessions; 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 (a stock market index doesn't, actually, exist after all - every equity investor owns individual stocks, it's simply that with an index fund, you're automating and outsourcing the choice of which stocks you own to a methodology controlled by a handful of people in New York.
For example, if you had noticed how, since 2003, they have been quietly modifying the rules of the index by kicking out a lot of profitable firms and changing the guidelines so it's easy for big, rich insiders to unload their overvalued stock on smaller investors, you might decide to augment your index fund with the removed shares by purchasing them alongside your existing holdings).
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.
They make this available free to members of the library. This is an excellent option for those without the money to spare but who still want to start the journey to understanding investment research.