Stock Screen: Buy 'Em Like Buffett

Warren Buffett has earned a reputation as one of the preeminent value investors of all time. His Berkshire Hathaway (BRKA) holding company has stakes in insurance, publishing, retailing, and manufacturing, among other businesses, and more than $28 billion of cash on hand, in addition to $102 billion of securities.

But like others in the financial services industry, Berkshire Hathaway has fallen on troubled times. Its second-quarter earnings report, posted in mid-August, showed a 7.5% decrease in earnings from the year-earlier period, mostly the result of a 43% drop in underwriting profits and a mere 2.6% rise in investment income. In that report, Buffett disclosed he had purchased, for Berkshire's investment portfolio, a new stake in NRG (NRG), and added to already existing stakes in Sanofi-Aventis (SNY) and Ingersoll-Rand (IR).

But how does Buffett make his picks? What exactly is "Warren's Way?" In his rare public remarks and widely followed annual letters to Berkshire shareholders, Buffett makes it sound very simple: He says he buys stocks that are "available at a sensible price."

In fact, Buffett uses sophisticated screens to determine which companies belong in his portfolio. Specifically, he uses these five investment criteria:

•Free cash flow net income after taxes, plus depreciation and amortization, less capital expenditures) of at least $250 million.

•Net profit margin of 15% or more.

•Return on equity > of at least 15% for each of the past three years and the most recent quarter.

•A dollar's worth of retained earnings creating at least a dollar's worth of shareholder value over the past five years.

•Ample liquidity. Only stocks with a market capitalization of at least $500 million are included.

In the Standard & Poor's "Warren Buffett" screen, we've added one more criterion to eliminate overvalued stocks. Overpriced stocks are identified by comparing our five-year discounted cash flow (DCF) estimate with the current price.

Forty-nine names emerged when the screen was completed.

It is important to note that these are not stocks that Buffett has purchased or announced plans to purchase. They are simply stocks that meet the criteria that Buffett has emphasized in the past. It is relevant to note that many of the huge (billions of dollars) charges taken by financial institutions over the last three quarters have had a minimal impact on their cash flow, since they represented a paper writedown to portfolios compared with the actual sale (such as Merrill Lynch (MER) announced). In adding the S&P DCF requirement, several financial issues dropped out, which appears to fit well with Buffett's current stance on the approach.

Oil at $80 a Barrel?

In recent years, energy traders plus an active hurricane season have usually meant one thing for oil: higher prices. Yet with the departure of Hurricane Gustav, a rally for the embattled greenback is overshadowing new storm systems churning away in the Atlantic and showing how the prospect of a choppy U.S. economy is scaring traders far more these days than turbulent weather.

The price of a barrel of the benchmark West Texas Intermediate crude for October delivery dropped nearly $6 on Sept. 2, to settle at $109.71 on the New York Mercantile Exchange (CME). That's the lowest level since early April, and a slide of $37.56 since the record of $147.27 on July 11.

While Gustav appears to have delivered only a glancing blow to oil and gas assets in the Gulf of Mexico, the influence of Mother Nature has waned among traders and investors. The souring U.S. and global economies, alongside a strengthening dollar, are weighing heavily on oil prices, analysts say. In fact, the oil "demand destruction" implied by weak U.S. economic growth currently dwarfs both weather and geopolitical worries in determining oil's price. "If you can't rally with a hurricane up your nose—and 2 million barrels of refining capacity and 96% of your offshore supply under threat—it's hard to see what will cause a rally," says Peter Beutel, a veteran analyst with the energy risk management firm Cameron Hanover.

Back to Reality
Oil prices have slid so far and so fast that the retreat has led analysts to predict further puncturing of what they call a speculative bubble. Many analysts don't see a floor at $100, but rather at levels as low as $70 or $80. "This is start of a fall to $80 crude by the end of the year, maybe as early as September," says Joel Fingerman, principal of FundamentalAnalytics.com, a Chicago-based energy consulting firm.

"Oil prices are dropping because they are inflated," says Fadel Gheit, senior energy analyst for Oppenheimer (OPY). "You cannot sustain an artificial price forever. At the end of the day supply-demand fundamentals will take over."

Oil traders and some analysts have been blaming high oil prices on rising demand from developing economies, but now troubles in the U.S. economy are spreading across the globe. "A few months ago it was all about Chinese demand," says Stephen Schork, an energy consultant in Villanova, Pa., and editor of The Schork Report, a daily energy newsletter. "But a lot of the strength [in oil's price] was hype and hot air."

In addition to a gloomy economic environment and lower demand, a strengthening dollar is also behind oil's recent drop. Since July 15, the dollar has gained 8.5% against the euro. "The rise in the dollar is the best explanation of oil's drop," says Beutel.

Airline Stocks Ascend
While energy companies' stock prices fell on Sept. 2, airline stocks jumped at the prospect of cheaper fuel. Northwest Airlines (NWA) gained 13%, to $11.07. UAL (UAUA), the parent of United Airlines, was up 9.5%, to $12.16, and AMR (AMR), American Airlines' parent, jumped 8.7%, to $11.23. In 2008, airline shares have traded inversely to crude.

Despite the drop in crude prices, the market remains volatile. That's why some analysts say the market could again cede ground on supply and demand, resuming a trek upward. Earlier this year, several investment banks made headlines with reports forecasting a "super-spike" for crude, based on producers' inability to keep pace with soaring demand from China and the Middle East. Goldman Sachs (GS) energy strategist Arjun Murti was among those in that camp; he predicted $200 per barrel in coming months.

Indeed, crude prices could recover if the dollar weakens again or if oil-producing countries trim their output to keep prices high, as some analysts have speculated. OPEC is scheduled to meet on Sept. 9 in Vienna and has indicated it may defend a price of $100 per barrel.

Hanna on the Way
There is also ample meteorological uncertainty. On Tuesday, Tropical Storm Hanna was predicted to come ashore in Georgia and South Carolina late in the week and could regain hurricane strength later in the day. Tropical Storm Ike formed late Monday in the Atlantic Ocean and may become a hurricane in the next day or two as it approaches the Bahamas. Meanwhile, Tropical Storm Josephine formed in the eastern Atlantic, and the National Hurricane Center said it could near hurricane force as it moves west.

The verdict? The only certainty in the oil market remains volatility. "I have no idea where oil prices are going from here," says Gheit. "Go ask Goldman Sachs."

Stocks Plunge as Economic Fears Worsen

Wall Street's mood darkened considerably Thursday as market jitters about prolonged economic pain deepened on weaker labor-market data, generally negative retail sales reports for August, and a stark warning on sinking asset values from bond-market guru Bill Gross. Major equity indexes were each lower by more than 2% in afternoon trading.

Oil prices gave up early gains to trade slightly lower as the dollar gained upward traction.

On Thursday afternoon, the Dow Jones industrial average was trading 250.12 points, or 2.17%, lower at 11,282.76. The broader S&P 500 index was down 27.42 points, or 2.15%, at 1,247.27. And the tech-heavy Nasdaq composite index fell 51.09 points, or 2.19%, to 2282.03.

The selloff in stocks accelerated after the S&P 500 broke below the 1262 level on mounting worries that more hedge funds might be in trouble and growing uncertainty about the economic outlook with a changing of the guard in Washington, S&P MarketScope said. On the New York Stock Exchange, 24 stocks were trading lower for every four that were showing gains, while on the Nasdaq the ratio was 20-5 negative amid slow trading. Boeing Co. (BA) shares were down on a strike threat, with financial stocks also falling.

There are fresh signs that financial firms won't find it so easy to replenish the capital on their balance sheets. Merrill Lynch & Co. (MER) has hit a snag in its talks to sell a significant portion of its bad loans to Korea Asset Management Corp. due to disagreement over price, the Korean firm's CEO told Bloomberg News. Failure to reach a deal may suggest that Merrill, the third-largest U.S. securities firm, and Lehman Brothers Holdings (LEH) might have to cut prices for the assets they're trying to sell in order to raise capital as mortgage-related losses widen.

That and related remarks by PIMCO bond fund manager Bill Gross in his September Investment Outlook, were also likely helping to deepen investor pessimism toward the markets. Gross said in his monthly letter on the PIMCO website that with liquidity drying up and private investors getting more wary of risking their own capital, substantial new sources of buying are needed in order to prevent much more destructive asset deflation. He called for policies that would lead to the U.S. Treasury funding not only the mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE) but also "Mom and Pop on Main Street U.S.A., via subsidized home loans issued by the [Federal Housing Authority] and other government institutions."

Among the retailers to release disappointing sales figures, Target (TGT) reported a 2.1% drop in sales in stores open at least one year for August and a 3.1% increase in total sales. The company said same-store sales performance in August was in line with its planned range.

Abercrombie & Fitch (ANF) posted 11% lower same-store sales for August and a 5% decline in total sales. The TJX Companies Inc. (TJX) reported no change in same-store sales from July, but said they were slightly below plan, driven by the unanticipated negative impact of foreign exchange rates. TJX posted a 4% gain in total sales for August.

Leading the day's new economic data, nonfarm private employment fell 33,000 from July to August on a seasonally adjusted basis, according to the ADP National Employment Report. The estimated change in employment from June to July was revised down from a gain of 9,000 to a gain of 1,000 jobs.

Initial jobless claims for the week ending Aug. 30 climbed 15,000 to an annualized rate of 444,000, much higher than the median forecast of 425,000. Initial jobless claims averaged 439,000 in August, well above prior averages of 406,000 in July, 388,000 in June, and 369,000 in May.

The trend in initial and continuing claims so far this year implies a much softer labor market than last year, though distortions in July and August have made it difficult to get a good read on underlying trends, said Action Economics, which still expects a 70,000 decline in payrolls and a steady unemployment rate of 5.7% for the August employment report that comes out Friday.

The Institute for Supply Management's non-manufacturing index increased to 50.6 in August, slightly higher than expected, from 49.5 in July.

Second-quarter nonfarm productivity was revised sharply higher to 4.3%, more than expected, from the initial 2.2%, while unit labor costs fell 0.5%. The hours-worked series was revised down to a decline of 0.8% from a 0.5% decline in the advanced report, marking the fourth straight quarterly decline.

Oil prices, which initially were rising as Hurricane Ike gathered strength in the Atlantic, came back down as the dollar index resumed its move upward, apparently shrugging off more bullish supply data from the Energy Information Administration. The EIA report showed a 1.9 million barrel drop in crude inventories, a 1.0 million barrel decline in gasoline supplies and a 400,000 barrel fall in distillate stockpiles.

Refining margins have improved with 96% of oil production and 92% of natural gas production in the Gulf of Mexico remaining shut down in the aftermath of Hurricane Gustav, according to CNBC Business News.

Crude oil for October delivery was trading $1.48 lower at $107.87 a barrel.

Among other stocks in the news on Thursday, Guess Inc. (GES) posted second-quarter earnings of 57 cents a share, vs. 40 cents a year ago, on a 8.1% rise in same-store sales and 33% higher total sales. The retailer sees fiscal 2009 earnings of $2.47 to $2.53 a share on revenue of $2.06 billion to $2.11 billion. S&P reiterates its buy rating.

Ciena Corp. (CIEN) shares were down after the supplier of communications networking equipment posted 37 cents a share in non-GAAP earnings for the third quarter, vs. 41 cents a share a year ago as higher operating expenses offset a 24% rise in revenue. The results were in line with analysts' forecasts. The company sees revenue of $190 million to $210 million in the fourth quarter. S&P cut its earnings estimate and target price but maintained its hold rating.

Hibbett Sports Inc. (HIBB) announced that effective immediately, the company and Nissan Joseph, its president and chief operating officer, have agreed to part ways due to philosophical differences. Hibbett will begin a search for his replacement. Raymond James downgraded the stock to market perform from outperform.

Major European indexes were trading lower Thursday. In London, the FTSE 100 index fell 2.50% to 5,362.10. In Paris, the CAC 40 plunged 3.22% to 4,304.01, while Germany's DAX index sank 2.91% to 6,279.57.

In Asia, Japan's Nikkei 225 lost 1.04% to end at 12,557.66, while Hong Kong's Hang Seng index shed 0.95% to close at 20,389.48.

Treasury market

Treasury bonds were trading higher as a safe haven bet by nervous investors watching equity losses. The 10-year note moved up to 102-30/32 for a yield of 3.64% and the 30-year bond climbed 25/32 to 103-25/32 for a yield of 4.27%.

Is It Time to Sell Your Foreign Stocks?

The stock prices of mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE) have cratered. The bottom of the worst housing slump since the Great Depression hasn't been reached. Fears of inflation are mounting.

Yet the dollar is rallying against foreign currencies. Despite recent gyrations, the U.S. Dollar Index, a futures contract reflecting the dollar's value against six major currencies, is up 9% since reaching a recent low on July 15. The turnaround is a major factor behind the stock market's 4% gain over the same period, along with the decline in oil prices.

What does the possibility of a stable-to-stronger dollar mean for the international stocks in your portfolio? Is it time to bail? A lot is at stake: Since 2003, some $490 billion in net new cash poured into international stock funds, vs. a net $208 billion for domestic stock funds, according to the Washington (D.C.)-based Investment Company Institute. And how about foreign bonds? Thanks to the weak dollar, U.S. investors in foreign bonds have enjoyed a currency-translation boost to their yields in recent years.

Thinking through the impact of the dollar's moves used to be simpler. The old maxim was that when the dollar was strong you should flee international securities, and when it was weak you should send money overseas. But hewing to simplistic truisms is hazardous in today's quicksilver global capital markets. Profiting from any turn in the dollar's fortunes requires a more nuanced strategy now—and patience.

First of all, market veterans call for a reality check on this rally. Few expect the dollar to retrace years of losses anytime soon, and a 9% gain is tiny compared with the greenback's 50% slide against the euro and 30% tumble against the British pound over the past six years. Still, the global economic cycle may favor America's currency. While the U.S. slid into a downturn or even a recession about a year ago, only recently has growth faltered among other major industrial nations, especially in Europe. "We are picking up and they are slowing," says James W. Paulsen, chief investment strategist of Wells Capital Management (WFC).

The global business cycle should affect the gap between interest rates set by the world's central banks. There is a growing expectation that the difference in yields will narrow, especially between the U.S. and Europe. The Federal Reserve Board's benchmark rate is 2% while that of the European Central Bank (ECB) is 4.25%, and Europe could become a less attractive parking place for yield-hungry investors as the ECB combats economic weakness. "The dollar rally we have seen has been especially against the euro," says Bob Doll, vice-chairman and global chief investment officer of equities at investment management firm BlackRock (BLK). "The ECB's next move will be to lower rates, and I'm talking in months rather than years."

Yet even as the outlook for the dollar improves compared with the euro and currencies of other major developed nations, it could continue to depreciate against currencies of major emerging markets. That's an idea investors seem to be testing. The CurrencyShares Euro Trust (FXE) is down 5.7% over the past three months, for example, while the WisdomTree Dreyfus Brazilian Real (BFZ) is up 4% and the CurrencyShares Mexican Peso Trust (FXM) gained 4.1%. "Even if the decline against the euro is over, there may well be other non-European currencies that will appreciate against the dollar," says Burton G. Malkiel, an economics professor at Princeton University and author of the investing classic, A Random Walk Down Wall Street.

Why? Emerging-market growth rates dwarf those of the developed world. Their interest rates are higher, too. Over time a number of the countries will rely less on exports and more on consumers for growth. Take China: A mere 40% of its economy is driven by consumers, vs. 70% in the U.S. The move from an export-led economy to a consumer-driven one will encourage developing nations to lessen control over currency fluctuations and haltingly embrace floating exchange rates, which will allow their currencies to appreciate against the dollar.
PORTFOLIO TWEAKING

By this calculus, investors should comb through their developed world and emerging market securities and treat them differently, at least when it comes to the expected impact of currency on asset values. Long-term investors with fortitude should maintain exposure to fast-growing "frontier market" economies. But when it comes to Europe and Japan, portfolio tweaking could pay off.

Dollar strength would favor the U.S. stock market over foreign bourses. Multinationals, however, might find it tougher to outperform their smaller, more U.S.-focused brethren. The profits of U.S.-based global giants are by definition more exposed to foreign revenues. "The tailwind is morphing into a headwind," says Alec Young, international equity strategist at Standard & Poor's (MHP). But big-cap exposure to overseas economies varies greatly. Tech companies in the S&P 500-stock index get about 55% of revenues from abroad. It's 32% for large-cap financials. Even less exposed: railroads, retail food chains, and utilities.

A stronger dollar would have a bigger effect on foreign bonds. Simply put, dollar gains cut the value of interest and principal payments of foreign bonds when converted into dollars. That prospect spurred Ross Levin, head of Accredited Investors in Edina, Minn., to shift client money early this year from an unhedged foreign bond portfolio into a Pimco (PFVIX) dollar-hedged mutual fund. "We wanted to stay in foreign bonds, but take out currency risk," he says. A beefier greenback also adds to the pressure on commodity prices, which are being hurt by slowing global growth. But, cautions Peng Chen, president of Ibbotson Associates, "long-term, the fundamentals of strong demand are still there, especially given demand from emerging countries."

Stocks Up Slightly On Stronger Factory Orders

U.S. equities recouped early losses and were trading higher on Wednesday, likely buoyed by a better than expected factory orders report for July, which showed the manufacturing sector is holding up surprisingly well in spite signs of economic slowing in other parts of the U.S. economy. Oil prices continued to slip on strengthening in the U.S. dollar.

On Wednesday, the Dow Jones industrial average was trading 14.74 points, or 0.17%, higher at 11,537.52. The broader S&P 500 index inched up 1.20 points, or 0.13%, to 1,278.77. And the tech-heavy Nasdaq composite index gained 3.03 points, or 0.13%, to trade at 2,352.27.

On the New York Stock Exchange, 15 stocks were in the red for every nine that were rising, while the ratio on the Nasdaq was 12-8 negative amid active trading, S&P MarketScope said. Bond prices were climbing slightly, while a stronger dollar index continued to put pressure on commodity prices.

The closing of hedge fund manager Ospraie Management's flagship fund, which plummeted 27% in August on losses in energy, mining and natural resources stock holdings, is another blow to the commodities markets, as it's the one of the biggest closures ever of a commodities-focused hedge fund. The fund, which had an estimated $2.8 billion invested as of early August, had lost 38.59% of its value year-to-date as of Sept. 2.

The fund closing, announced by the firm's founder Dwight Anderson in a letter to investors on Tuesday, could spell more bad news for Lehman Brothers Holdings (LEH) , which has owned a 20% stake in the hedge fund manager since 2005.

Among stocks moving Wednesday, the Coca-Cola Co. (KO) said it has offered to buy China Huiyuan Juice Group Ltd., a Hong Kong listed company that owns the Huiyuan juice business throughout China, for $2.4 billion. The purchase, which is subject to preconditions relating to Chinese regulatory approvals, is expected to reduce Coca-Cola's earnings by three to four cents a share in the first full year after completion of the deal, and would boost profitability in the third year after completion. Standard & Poor's maintained its strong buy rating on the stock.

On the economic data front, July factory orders unexpectedly rose 1.3%, above the median estimate of a 0.4% gain and after an upward-revised 2.1% increase in June. Excluding transportation, factory orders were up 1.0% in July.

The U.S. factory data continue to defy recession fears, as the support from the booming commodity-sensitive and aerospace industries is offsetting weakness in other sectors, such as autos, Action Economics said.

The Federal Reserve's Beige Book, to be released Wednesday afternoon, could provide anecdotal evidence of economic slowing as well as indications of easing price pressures, ahead of the Sept. 16 Fed's policy committee meeting, S&P MarketScope said.

The Mortgage Bankers Association released its weekly mortgage applications survey for the week ending Aug. 29, showing a 7.5% increase in the Market Composite Index, a measure of mortgage loan application volume, on a seasonally adjusted basis. On an unadjusted basis, the Index rose 5.8% from the prior week and was down 27%. from a year ago. The Refinance Index increased 2.1% percent and the seasonally adjusted Purchase Index increased 10.5% from one week earlier.

Eric Rosengren, president of the Boston Fed, is scheduled to speak about the economy at a gathering in New Hampshire Wednesday afternoon.

Oil prices were trading lower, extending Tuesday's losses as the dollar continued to gain strength, and due to estimates of minimal hurricane destruction to energy installations in the Gulf of Mexico and signs of ongoing demand destruction from a slowing global economy. There's also an element of technical chart weakness dogging oil prices after the breech of the 200-day moving average on Tuesday for the first time since May, 2007.

Crude oil for October delivery was trading $1.67 lower at $108.04 a barrel.

Among other stocks in the news on Wednesday, First Horizon National Corp. (FHN) said it expects that as a result of persisting market weakness and ongoing efforts to aggressively address problem loans, 2008 net charge-offs are likely to exceed the previously expected range of $385 million to $485 million by about $100 million.

Forest Laboratories (FRX) and Laboratorios Almirall announced results from two global Phase III studies of aclidinium bromide, a novel long-acting inhaled anticholinergic for treatment of chronic obstructive pulmonary disease. The companies say studies confirm the bronchodilatory effect of aclidinium at the dose tested, although the magnitude was lower than seen in previous studies.

Medivation Inc. (MDVN) and Pfizer (PFE) agreed to develop and commercialize Dimebon, Medivation's investigational drug for treatment of Alzheimer's disease and Huntington's disease. Medivation will receive an up-front cash payment of $225 million and is also eligible to receive payments of up to $500 million as development and regulatory milestones are reached, plus additional undisclosed commercial milestone payments.

Major European indexes were trading lower Wednesday. In London, the FTSE 100 index fell 1.62% to 5,529.70. In Paris, the CAC 40 shed 1.55% to trade at 4,468.53, while Germany's DAX index was down 0.64% at 6,477.04.

In Asia, Japan's Nikkei 225 gained 0.64% to close at 12,689.59, while Hong Kong's Hang Seng index lost 2.17% to end at 20,585.06.

Treasury market

Treasury bonds were gaining ground on trepidation in the equities market. The 10-year note moved up to 102-09/32 for a yield of 3.72% and the 30-year bond climbed 12/32 to 102-24/32 for a yield of 4.33%.

Stock Analysis - Do This Right and You Could Make a Fortune!

Stock analysis, when done correctly, will change your life! It will help you to turn a small amount of personal savings into a quickly snowballing trading account. Analyzing stocks correctly has the potential to free you from work, debt and a feeling of "want" into one of the rare people who are truly independent, can live anywhere in the world they like and need only to work a few hours each week. It is for these reasons that many people seek to master the stock markets. Learning how to do stock analysis the right way is the first step on a liberating journey of self discovery and personal fulfillment.

Let me take you on a little voyage of discovery....jump into my time machine.

What is "the right way" to do stock analysis? Simple...the right way is the way which has produced the best returns over a long period of time. The feature I love most about the stock market is everything is recorded! We can literally jump back in time to great traders, high performing stocks and market conditions and learn from them. How do we do it? We look for patterns and common denominators. Once we have those, we try and incorporate them into our trading.

This is what Warren Buffet did. It's what Peter Lynch did, Jim Slater did it too, and so did Marc Faber, George Soros, Jesse Livermore, William O Neill and Nicholas Darvas. The list could go on and on.

They researched why stocks behaved the way they did, cherry picked the winners and then went out and looked for them!

Their first step, to a man, was stock analysis...more precisely, fundamental analysis. Fundamental analysis is about which type of stocks we choose. It revolved around the company that's underneath the quarterly reports. Great fundamental analysts look at factors, like earnings, profit margins, operating profits, sales growth, product pipelines, management quality, the competitive position, debt to equity ratios, and many more. These fundamental factors tell us about the company as a business.

There is another type of analysis...technical analysis. It revolves around the strength of the industry group of the stock, who is buying it right now, and how much they are buying, technical analysis of the stock chart, its performance over a period of time against its peer group and the market in general. Now, most people who rely on fundamental analysis have dirty raincoats and big overdrafts in my experience. Many people, though not all, who rely on fundamental analysis suffer from ever increasing market swings.

Most highly successful sophisticated investors look at both types of analysis...it's a kind of techno fundamental analysis. The balance in this method is heavily weighted to fundamental analysis....about 80% with technical analysis being about 20% of the weighting. It's more important to buy good companies than it is to jump on great entry points in the stock charts of poor companies.

As investors, we all want to have the "margin of safety" which Benjamin Graham talked about. Buying stocks in outstanding enterprises goes a long way to providing this so that our downside is limited.

However, on its own, this isn't enough protection. Great companies like Cisco have gone through stomach churning corrections of almost 90%. The missing part here was technical analysis...buying the best companies at exactly the right time instead of simply buying the best companies.

When you put both pieces of this stock analysis puzzle together, buying great companies and buying them at precisely the right time, your success in the stock markets is almost assured.
So when you think about investing in or trading stocks, use both technical and fundamental analysis. Keep your overdraft low and your rain coat clean by doing stock analysis the right way!