How to Find Value Stocks and Ideas

To find the best value stock ideas, you need a competitive advantage over the next person when it comes to stock picking.

I’ve been asked many times how I’m able to come up with the obscure totally ignored, low risk high return stocks. It isn’t difficult, and I’m hear to let you in on how I do it.

Considering that value investing has been in existence for decades with the likes of Benjamin Graham and Warren Buffett introducing the world to value investing, the value investment technique still remains effective because a majority of investors shy away from the hard work involved.

I previously wrote about how to find stock ideas, but I hope these additional few techniques will make it easier and give you an added advantage.

How to Find Special Situation Stocks

The SEC is a great place to find mergers, stock tenders and going private transactions.

In addition to the standard search, the SEC has an “advanced” search engine. Let me go through how to find special situations with it.

When companies file documents to the SEC, they do so in a document called a Schedule 13E-3 and formatted to support XML (you don’t need to understand what XML is in order to know how it works).

There are several tags within the XML header which you can use to narrow down your search. If you look a snippet of the code below, you will see you can make highly targetted search queries using tags such as “COMPANY-NAME”, “FORM-TYPE”, “FILING-DATE” etc.

<COMPANY-NAME>Company Name
<PUBLIC-DOCUMENT-COUNT>Public Document Count
<ACCESSION-NUMBER>Accession Number
<TYPE>Form Type
<FILING-DATE>Filing Date

(More information from http://www.sec.gov/edgar/searchedgar/edgarzones.htm )

e.g. I have a shortcut button on my toolbar that links to the query

This query returns the results of all Schedule 13 filings, which includes merger, tender and going private transaction notices from August 2009. Change the date from 200908* to 200909* to display the results of September 2009 and update each month.

Get a Twitter Account!

Twitter has already become a hub of spam and useless information, but it is still incredibly useful for investors. Particulary for stocks you follow or finding special situations.

Type “reverse split” in the search box and see a list of updates on reverse split stocks that people are talking about.

The reason Twitter is useful for this is because most of the results are close to real time or a couple of days old at most. You won’t be getting outdated results from months back.

A Decent Search Aggregator

I use to spend more time than I wanted searching for information my companies through various forums and websites.

The Lion is a website that lists all twitter updates, press release, blog posts and forum updates on your stocks from many different sources.

A great way to see what others are saying.

Increasing Your Competitive Advantage

Create a bookmark on your toolbar to point directly to the SEC company search page.

The SEC website isn’t the user friendliest place on the internet but make sure you visit the SEC pages as your main source of official company related news and numbers.

Other than a couple of 3rd party sources I use in my valuation spreadsheets, I rarely ever look at the financial numbers from Google, Yahoo or other places. I get my numbers directly from the source.

There are times when numbers are misquoted which leads to lofty valuations or missed opportunities, but the SEC provides it all in clear black and white.

This may only happen 1 in 50 times but that 1 time could cost you dearly.

Stick with the source to get an advantage and to find information on your companies.

Get to Work

Time to get to work and flip over those rocks people just pass by. Half dollars still exist if you look carefully.

Reader Shane, was able to capitalize on a FELI reverse split situation after reading my previous post and instructions on how to search special situations from the comments which resulted in a 200% gain in 1 day.

Powerful stuff yet incredibly low risk if you do your homework.

What is Old School Value?

Old School Value is a suite of value investing tools designed to fatten your portfolio by identifying what stocks to buy and sell.

It is a stock grader, value screener, and valuation tools for the busy investor designed to help you pick stocks 4x faster.

Check out the live preview of AMZN, MSFT, BAC, AAPL and FB.

20 responses to “How to Find Value Stocks and Ideas”

  1. I was actually just considering the very topic you’re talking about. You’re correct in stating that the SEC is the primary repository of information regarding stocks. With such great data there, it got me thinking. Surely there’s a better way of getting it, then it hit me, RSS feeds! There has to be a tech-whizz out there who could set up RSS alerts based on ticker symbol/form filings? Rather than having to manually check for filings, you could simply get recent filings pushed to you.

    What do you reckon?
    .-= Carrigaline´s last blog ..The Changeling =-.

  2. Jae Jun says:

    I have thought of that for a while but I’m not a programmer so unfortunately it is out of my scope and I don’t think anyone is going to do it for free…
    But it can and has been done by programmers. The only question is whether anyone wants to spend possibly hundreds of dollars for it.

    I’ll just stick to my simple button on the toolbar 🙂

  3. slinj says:

    I believe there is currently rss feed at SEC website, so you can get the update automatically. Joe (Fwallstreet) mentioned this in his blog. I haven’t try that out myself though, wasn’t too much an issue for me to go back and check on it periodically.

  4. Jae Jun says:

    The RSS tool at F Wall Street was for annual reports but I’m after the ability to specifically choose the form types.
    Maybe I should take up programming in my spare spare time.

  5. Rene Nederhand says:

    You can use a service like feed43 to extract exactly the data you need and convert it into an RSS feed. No programming needed.
    I just did that with filing type 13e3. You can find the result here: http://feed43.com/historical13e3.xml

    Realtime (most current additions) can be find here:
    http://feed43.com/realtime13e3.xml (At the time of this post no new filing have been made, hence the list will be empty)

    Please keep in mind that you will have to update the date in the first url every month. I’ll see if I can change that.

    Maybe something to offer on your weblog?

  6. Jae Jun says:

    @ Rene,

    This is exactly what I was looking for! Thank you so much Rene. Makes life easier. I don’t mind manually updating each month.
    I hope other readers actually read the content, otherwise they’ll be missing out.

    Now I’ll just have to figure out how to use it.

  7. Alan says:

    Hopefully not a stupid question. You said you had a shortcut on your toolbar linking to the query “FORM-TYPE=13e3 FILING-DATE=200908*”

    I went to the edgar website and that query is rejected. Exactly how did you create that query? On what page? Be simple in your response, please.


  8. Jae Jun says:

    @ Alan,

    I should have mentioned that the sec server is very slow and unreliable when it comes to searching and entering queries.

    I get the same error quite often. Just keep refreshing and you’ll get the results 3/10 times.

    So go to http://www.sec.gov/cgi-bin/srch-edgar and then enter the search string.

  9. Alex says:

    Does anyone know how to change the search to look for spin off situations? I tried searching for form 10, but I don’t get any results.

  10. Jae Jun says:

    Try looking at what forms were submitted for companies that already spun off children companies. Interactive Corp is a good one to look at.

  11. Alex says:

    I believe I figured it out. The below should return spin off situations.


  12. Bibi says:

    Very nice. Thanks for this.

  13. john says:


    I noticed the SC TO form also comes up from the search string. Is that different from the 13-e? will it always come up together with the 13-e?

    also, are there other forms used in special situations setups?

    thanks for the education!

  14. Jae Jun says:

    @ john,

    Companies file SC TO forms for various reasons but it is usually for stock tenders and reverse splits.

    I can’t remember everything but here is a website that references all the different types of forms submitted.

    Alex above posted that for spinoffs you use FORM-TYPE=10-12b

  15. Jae Jun says:

    Did you all see that the search string for the SEC now has a RSS link in the results?

    Awesome stuff! Customize all you want and then grab that RSS link for each combination. Bloody fantastic.

  16. john says:

    Jae, thanks for answering my question. Also, I do see the RSS and added it to my google reader! Thanks!

  17. Jae Jun says:

    remember to check your date in the search string. I think the RSS will just grab that date as well. You don’t want to be left with nothing but old data.

  18. Marc says:

    I realize this is a very old posting but I still found it highly useful. However, does this method work with the new EDGAR search engine?

  19. Yes it will. Edgar has improved a lot, but the foundation is still the same.

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