Here’s a tool that I created that will drastically cut your research time in half.
There’s two parts to this.
1. A qualitative research checklist of things to look for from the SEC filings (10-K, 10-Q, Proxy).
2. A fundamentals investment scorecard which goes through the things you should look for in the income statement, balance sheet and cash flow statement.
If you don’t want or need the instructions and details, go ahead and click the image below and enter your info. I’ll get the scorecard sent to you right away.
However, you can easily customize it to make it your own. Just look at how I organized everything and do the same thing for the numbers that you like to look at.
Another important note is that this investment scorecard is NOT suited for every stock.
It’s for “ordinary” value stocks.
It won’t work for
- financial stocks
- bankruptcy special situations
- you get the point
How to Use this Investment Scorecard
The qualitative research checklist includes
- Information to look for from the 10-K
- Information to look for from the 10-Q
- Information to look for from the Proxy
- Information to look for from the 8-K
Just find the documents from the SEC and look to see whether anything stands out. It’s more of a red flag detector.
For the investment scorecard, here’s what the income statement scorecard looks like.
The left column defines the max number of points a company can get for a particular income statement item.
For margins analysis, I’ve assigned a max score of 1 to the company. And you give the points based on criteria that it matches. For the example company, the margins are increasing so I gave it 1 point.
For Net Income, it’s consistent and higher than competitors so it gets the max score of 2.
Fill out the yellow boxes and you’ll get your fundamentals score for each section which is then normalized into a percentage to give you a score out of 37.