It is important to define the inflection point of change. Perhaps the company has made a recent acquisition or has a dynamic new product. Change might come through regulation or through competitive developments. It is at the inflection points of change that investors see a swing up or down in the profit margin, or an upwards or downwards movement in the earnings multiple, as the stock market reacts to the change and expectations are adjusted accordingly.
Sources of information include the financial information provided by the company, but also go far beyond that. The analyst makes contact with numerous sources - competitors, suppliers, regulators, and customers, in an effort to draw as much information as possible from outside the company’s management.
Valuations are monitored by considering the earnings multiple relative to the company’s growth rate. Market cap relative to annualized revenues provides another look at valuation.
Both buy and sell recommendations are made in Focus Reports. The Atlantis format of a two page report on each company gives investors summary points on the reasons to buy or sell, as well as a quick sketch of sources of revenue, profit margins and growth, and an analysis of competitors, suppliers, and key variables which could affect the company’s business.
The Weekly Update is sent via email to all clients prior to the opening of the market on Monday morning. This one-page format highlights three or four companies with a brief analysis of the current situation or recent news. Action-oriented investors might look to the Weekly Update for early warnings of changes in momentum.
The Quarterly Summary is a 4 page report providing the key comments on the analyst’s favorite names. This memo is designed to refresh the ideas for those subscribers who may have chosen not to act on a recommendation when issued, or who may be awaiting opportunities in certain names.