Stock Historical Data Download V2.01 Available Now

Stock Historical Data Download version 2.01 is released! If you have purchased this software before, you can upgrade to the latest version simply by login to your account and reinstall the file. This release is mainly to solve the administration issue.
Besides the minor bug fix and GUI improvement, the new feature for version 2.01 is that it provides the options for users to download only the most recent stock price and consolidate the downloaded data into one single file

New Features

Download only the most recent stock price data

It allows users who update their stock quotes every day to only download the most recent stock price

Generate Consolidated File

Now the users can choose to generate the consolidated file that merges all output data into one. For users that trade stocks with commercial trading tools that can accept merged data, it would be convenient
If you haven’t purchased the Stock Historical Data Download, you can download the trial version here.

Stock Daily Quotes Tracker V 1.0 Available To Monitor Your Portfolio

We are pleased to announce that the Stock Daily Quotes Tracker (SDQT) version 1.0 is released! ! Stock Daily Quotes Tracker is the software that can asynchronously retrieve daily stock quotes for you. If you manage your own portfolio, 401k, employee stock options, or participate in employee stock purchase plan, it is a tool that can help you manage your positions based on the price movement. It provides both real time and 15 minutes delay mode depends on your needs. If you intend to buy/sell the stock once its price moves down/up to certain level, simply set it up and let Stock Daily Quotes Tracker monitor for you. Once the stock is out of the predefined range, it will issue an alert. Besides that, Stock Daily Quotes Tracker also provides the embedded stock information window that retrieves a particular company’s summary, news, and chart from Yahoo Finance; moreover, technical indicators such as Bollinger Bands, Moving Average, Williams %R, Parabolic SAR, MACD, MFI, ROC, RSI, Slow Stochastic, and Fast Stochastic are available to help you make decision
 

Main Features

· Only one time purchase fee, no further subscription fee
· When alert is issued, corresponding symbols will be highlighted and the software window/icon will be blinking so you won’t miss the alert.
· Batch monitors the symbol lists defined by you.
· Support both real time and delay mode
· Support the updating of stocks, indices, and mutual funds publicly traded in US and Canadian markets
· Customize the update frequency and price range to trigger alert
· Embedded stock information window is provided to browse stock detail without leaving the software
· Enhanced chart setting to support various technical indicators
· Asynchronous download
You can download the lite version here with absolutely no cost.  Please let us know if you have any question or suggestion.

Compare Financial Leverage across Different Sector

In the previous article “Calculate Financial Leverage”, we explained what financial leverage is and its effect for the company’s return on equity. We also used Starbucks’ financial report as an example to show the way to calculate the financial leverage. Even though there is no guide line in terms of the amount of financial leverage the company should take, it seems that different business sectors would have different financial leverage due to the nature of the business. In this article, we are going to investigate this assumption and see if it is true.
 

Methodology

Sector Categorization

We categorize companies into nine sectors based on Yahoo Finance definition. The nine sectors are Basic Materials, Conglomerates, Consumer Goods, Financial, Healthcare, Industrial Goods, Services, Technology, and Utilities.
 

Company Selection

Among all tradable companies, we choose those that can be traded by options. The reason for that is because we would like to select companies that have certain liquidity. The company that can be traded by options means that they have certain liquidity. Currently there are 2253 companies that is option tradable.
 

Financial Leverage Calculation

For each selected company, we calculate its financial leverage simply by dividing its return on equity by its return on assets. After the financial leverage ratio for all companies are calculated, we choose the median of all companies belong to a certain sector to represent the financial leverage for that particular sector. Note the median is used instead of average to avoid the distortion due to long tail distribution
 

Result

Following table is the calculation result

Sector	Sample Number	Median FL
Technology	428	1.875
Basic Materials	322	1.935
Healthcare	204	1.98
Services	449	2
Industrial Goods	183	2.03
Consumer Goods	209	2.13
Conglomerates	9	2.37
Utilities	77	2.6
Financial	372	5.475

There are several observations we can make from this table:

1. Technology, Basic Materials, and Healthcare have financial leverage below 2
2. Services, Industrial Goods, Consumer Goods, and Utilities have financial leverage between 2 to 3
3. Comparing to the other eight sectors, Financial sector has much higher financial leverage (5.475)
Following is the financial leverage distribution comparison between Technology sector (lowest financial leverage) and financial sector (highest financial leverage)
 

Commentary

From the analysis above, there is a strong correlation between the amount of financial leverage companies take and the sector companies are at. It can be explained by the nature of business. In order for a technology company such as Apple to prosper, it requires the company to have sufficient cash all the time to support its research and development work. On the other hand, a company in financial sector such as Bank of America generates profit by using other people’s money (deposit). That explains why it has much higher financial leverage than other sectors

Calculate Financial Leverage

In the previous article “Debt Equity Ratio and Debt Ratio”, we discussed the relationships between debt-to-equity ratio and debt ratio and showed the formula to derive either one from the other. In this article, we are going to discuss the financial leverage and show the relationships between financial leverage and debt-to-equity ratio and use Starbucks as the example to show the calculation of financial leverage from its income and balance sheet statement

What is Financial Leverage

Financial leverage is a ratio to measure the multiply effect on the original return. Although there are many techniques to achieve this, the simplest way for a company to leverage its equity is by borrowing money. Let’s use Starbucks’ financial statement to explain how Starbucks multiplies its return by borrowing money. Here is the link to Starbucks’ income statement and balance sheet statement.

Calculate Financial Leverage from Financial Report

From its income statement, Starbucks has net income $1245.7M in 2011. Also from its balance sheet, Starbucks’ averaged Total Assets during 2010-2011 is $6873.15M ((7360.4+6385.9)/2). That gives Starbucks’ Return on Assets (ROA) 18.12% (1245.7/6873.15). However, from the investor’s point of view, the return is higher than 18.12%. When we purchase Starbucks’ stock, we become the stake holders of the company. That means we own a portion of the company’s equity depends on how many shares we have. In that sense, the actual return from the investor’s point of view should be calculated by using averaged Total Equity instead of averaged Total Assets.
From its balance sheet, Starbucks’ averaged Total Equity during 2010-2011 is $4029.8M ((4384.9+3674.7)/2). So the Return on Equity (ROE) for Starbucks is 30.91% ($1245.7M/$4029.8M), which is 1.71 x 18.12%. Because part of Starbucks’ assets is debts, it is able to generate higher return and we call the ratio 1.71 financial leverage

Calculate Financial Leverage from Debt Equity Ratio

From the above example, we can see that financial leverage = Return on Equity / Return on Assets, while Return on Equity = Net income / Averaged Total Equity, and Return on Assets = Net Income / Averaged Total Assets
=> Financial Leverage= Averaged Total Assets / Averaged Total Equity
= (Averaged Total Liabilities + Averaged Total Equity) / Averaged Total Equity
=> Financial Leverage = Debt-to-Equity Ratio + 1
Take Starbucks for example, it has averaged total liabilities $2843.35M ((2975.5+2711.2)/2) and averaged total equity $4029.8M. That gives us debt-to-equity ratio = 0.71. Because financial leverage ratio is also = Debt-to-Equity Ratio + 1, we get the same financial ratio 1.71

Commentary

The formula we derived above is convenient because Debt-to-Equity ratio is a common ratio that we can get. Simply add 1 to the debt-to-equity ratio then we can get the financial leverage ratio

Debt Equity Ratio and Debt Ratio

In the previous article, we briefly talked about debt equity ratio and mentioned that debt equity ratio is related to the company’s financial leverage. However, many investors confuse debt equity ratio and debt ratio. Actually debt equity ratio is not the same as debt ratio but either one can be derived by the other one. In this article, we are going to explain the relationship between debt equity ratio and debt ratio

Debt Equity Ratio

Debt equity ratio is calculated by dividing a company’s total liabilities by stockholder’s equity:
Debt Equity Ratio = Total Liabilities / Total Equity (Eq. 1)
It gives investors an idea how a company has been aggressively borrowing money to grow its business. High debt equity ratio indicates that the company is aggressively expanding its business by using a large portion of capital that is not its own. If the incremental profit generated by expanding is higher than the cost of interests, the company is generating more profit compared to the scenario had company not borrowed the money. On the other hand, the company could generate larger than expected loss if the result doesn’t go well.

Debt Ratio

Similar to debt equity ratio, debt ratio is calculated by dividing a company’s total liabilities by its total assets, which is a company’s total liabilities plus total stockholder’s equity
Debt Ratio = Total Liabilities / Total Assets (Eq. 2)
From Eq. 1 and Eq. 2, we can derive:
Debt Ratio = Debt Equity Ratio / (1+Debt Equity Ratio) (Eq. 3)
Note from Eq. 3 we can see that Debt ratio always greater than or equal to 1 since debt equity ratio can’t be less than 0
Based on the equation above, we can easily calculate the debt ratio based on debt equity ratio.

Application

The concept of debt ratio can not only apply to individual company but also can apply to industry or sector level. If we use Stock Market Browser to investigate the debt equity ratio of 9 sectors, we see the sector Industrial Goods has the highest debt to equity ratio while Basic Material has the lowest debt to equity ratio.
 


 

We can apply Eq. 3 to calculate these two sectors’ debt ratio:
For sector industrial goods, its debt ratio = = 65.64%
For sector Basic Materials, its debt ratio = = 27.54%

Commentary

Although debt equity ratio is used more frequently, both debt equity ratio and debt ratio give investors the same information. However, debt equity ratio is more convenient when calculating a company’s financial leverage, which we will discuss in the next article

Knowledge Base

Version Release

Stock Historical Data Download

· Stock Historical Data Download V 1.6 Available.
· Stock Historical Data Download V1.63 is Available ...
. Stock Historical Data Download V2.01 Available

Stock Fundamental Data Download

· Stock Fundamental Data Download V1.0 Available Now
· Stock Fundamental Data Download V 1.23 Available Now.

Stock Market Browser

· Stock Market Browser V 1.0 Available Now
· Stock Market Browser V 1.18 Available Now

Stock Intraday Quotes Download

· Stock Intraday Quotes Download 1.0 Available Now
Stock Daily Quotes Tracker
. Stock Daily Quotes Tracker 1.0 Available Now
Stock Financial Statements Download
. Stock Financial Statements Download 1.0 Available Now

Tips and How To

Stock Historical Data Download

· Generate MetaStock ASCII Format by Stock Historical Data Download
· ASCII to MetaStock Conversion Utility

Stock Fundamental Data Download

· Introduction to Dividend Yield
· Ex-Dividend Date and Dividend Pay Date
· PE and PEG Ratio

Stock Market Browser

· Debt to Equity Ratio in Stock Market Browser

Stock Intraday Quotes Download

· Generate Stock Intraday Data for Excel

Investment Knowledge

· Market Risk Premium 101
· Measuring the Risk - Volatility
· Compare Profit Margin across Different Sectors
· Comparing the Volatility across Different Assets
· Debt Equity Ratio and Debt Ratio
· Dupont Equation and Its Implication
. Calculate Financial Leverage
. Calculate Asset Turnover Ratio
. Calculate Operating Margin
. Calculate Profit Margin
. Calculate Gross Margin
. Compare Financial Leverage Across Different Sector
· Introduction to Dividend Yield
· Ex-Dividend Date and Dividend Pay Date
· PE and PEG Ratio

Stock Market Browser V 1.18 Available Now

We are pleased to announce that the Stock Market Browser (SMB) version 1.18 is released! ! If you have purchased this software before, you can upgrade to the latest version with no charge at all
 

What’s New in Version 1.23

“Zoom in” option in Popup Menu

The Zoom in option in Popup Menu allows you to access all industries available from the sector you choose or allows you to access all companies available from the industry you choose. One of the wildly used situations would be to access all companies available from the industry you are interested in from “All Industries”. Suppose you are interested in getting a list of companies in “Business Equipment” that matches your screening criteria, you can simply highlight “Business Equipment”, right click mouse button, and then choose option “Zoom in”, just like sample screenshot below.



Following is the sample screenshot after choosing “Zoom in” Option:



The table will show the list of companies in “Business Equipment” industries. Also the Browser Window will highlight the industry you choose to give you an idea which sector this industry belong to (see red box above)

Add Online Resources Tab in Information Window

The Online Resources tab in information window allows you to access popular website to get more information about a particular company that you are interested in. Following is a sample screenshot



If you are interested in Xerox Corp. (XRX) in Business Equipment industry, you can double click XRX, Stock Market Brower will provide you basic company information such as its profile, news, and chart. If you want to get to know more about Xerox, simply choose Online Resources table and choose the website you prefer to have access. Currently you can choose the website among Yahoo Finance, Google Finance, MSN Money, and Stock Market Watch.
If you haven’t purchased the Stock Market Browser yet, you can download the lite version here with absolutely no cost

Debt to Equity Ratio in Stock Market Browser

Stock Market Browser is a tool that can give you a quick snapshot of the total stock market from sector down to individual stock. One of the financial ratios it provides to you is Debt to Equity ratio. However, the meaning of Debt to Equity ratio in Stock Market Browser is different from the traditional meaning of Debt to Equity ratio. In this article, we are going to use Caterpillar’s most recent balance sheet provided by Yahoo Finance to show the calculation of Debt to Equity ratio in Stock Market Browser and compare the number from traditional Debt to Equity ratio. Following is Caterpillar’s quarterly balance sheet from Yahoo Finance:

Traditional Meaning of Debt to Equity Ratio

Normally, Debt to Equity Ratio is defined a company’s total liabilities divided by a company’s averaged shareholders’ equity

From Caterpillar’s balance sheet of most recent quarter, it has total liabilities 68.09B and averaged total shareholders’ equity (12.883B + 14.162B)/2 = 13.52B. Based on the formula above, its debt to equity ratio would be 68.09 / 13.52 = 5.04
However, this number is different from the number provided by Stock Market Browser:



You can find out Caterpillar (CAT) under sector Conglomerate and industry Conglomerate.
As of 04/02/2012, Debt to Equity ratio provided by Stock Market Browser is 258

Derive Debt to Equity Ratio in Stock Market Browser

First of all, the unit of this ratio is 100%. That means 258 is actually 258%. So how Stock Market Browser derives 2.58?
Instead of using total liability to represent total debt, Stock Market Browser only use item “Long Term Debt” and “Short/Current Long Term Debt” to represent total debt. In other words, it only considers total long term debt as real debt.
Based on Caterpillar’s balance sheet of most recent quarter, it has short/current long term debt 9.648B and long term debt 24.944B. The Debt to Equity Ratio would be (9.648+24.944)/13.52 = 2.58, which is 258%
 

Conclusion

In the traditional definition, the company’s total liabilities is used to represent the total debt, but Stock Market Browser only uses total long term debt, which is the portion of liabilities that accrues the most of interest. Because it only uses the portion of liabilities that accrues the most of interest, the ratio can give investors a better measurement in terms of financial leverage and risk.

Generate Stock Intraday Data for Excel

Not everyone knows that Microsoft Excel has the ability to draw stock chart. If you don’t have professional charting tool, Microsoft Excel stock chart is a simple but useful tool to conduct initial analysis. For example, if you are interested in plotting Coca-Cola (KO) daily chart with 1minute interval, following are the steps to generate stock intraday chart by using data output from Stock Intraday Quotes Download

Step 1: Generate Data Output With Appropriate Settings

Microsoft Excel stock chart requires the data format to be Time-Volume-Open-High-Low-Close, which is different from traditional format, Time-Open-High-Low-Close-Volume. But no problem, Stock Intraday Quotes Download gives you the flexibility to choose the order of data field. Follow is the sample screenshot for the setting in “Customize the data field” window:



Following is the sample screenshot for the setting window:



Make sure the file extension is “csv” so that when you double click the output, it will be automatically opened by Excel. Also make sure the Add Header box is checked. Because we are interested in generating daily chart with interval 1 minute, choose Range to be 1 day and Interval to be 1 min. As for data source, it can be either Google Finance or Yahoo Finance, depends on your preference.
After that, simply add the symbol KO in the table and hit update.

Step2: Load generated data into Excel

Following is a sample screenshot after you open the generated data by Excel



If you are using Microsoft Excel 2010, you can find stock chart type in “Insert”->”Other Charts”->”stock”

Step 3: Generate the Chart

Following is the KO daily chart generated after selecting the column B – G and choose the right most stock chart type



That’s it. You can also use Excel to calculate some indicators such as moving average, RSI, and MACD, and plot them. It’s a tool you can consider and it is free if you already have Excel

Stock Intraday Quotes Download 1.0 Available Now

Stock Intraday Quotes Download 1.0 (SIQD) version 1.00 is released! It can download the stock intraday prices for you with no monthly subscription fee at all. With the support of various data format such as MetaStock, you are able to use SIQD to download the intraday stock data, convert it to MetaStock format, and load it into your charting tool. Tired of manually launching the software, opening the symbol list, hitting the update button every day? Don’t worry, Stock Intraday Quotes Download supports console mode that makes fully automation possible.

Main Features

· Only one time purchase fee, no monthly subscription fee
· Batch downloads the symbol lists defined by you. There is no limitation of the number of symbols
· Support data source from Yahoo Finance and Google Finance
· Asynchronous download
· GUI or console-only versions
· Define your own data format to download
· Support MetaStock ASCII 8 column format
· Support various data range (1 – 15 days) and interval (1 – 60 minutes)
· Customize the data file name with postfix option
· Fully automation through command mode

You can access the complete documentation here. Also we provide the trial version with absolutely no cost to you. Try it now and tell us what you think. We would be more than happy to get any feedback or suggestion from you!

ASCII to MetaStock Conversion Utility

 
Free end of day ASCII to MetaStock conversion utility is available now! It allows you to easily convert data generated from Stock Historical Data Download to MetaStock/Computrac format without any charges. Following is a simple instruction:

Step 1: Download the software

You can download the software from eoddata website here. You have to be a registered member to be able to download it. It is free to become a registered member

Step2: Generate stock end-of-day data

You can easily generate stock end-of-day data by using Stock Historical Data Download with appropriate setting:
1. For File Name Setup, the file extension has to be set as “txt” and the postfix has be set as “_date”. For example, if your end-of-day data is generated in 2012 March 24, type “_20120324” here
2. For Format Setup, the Date Format has to be set as “YYYYMMDD” and the Separator has to be set to none
Following is a sample screenshot of the necessary settings.



Following is the sample screenshot for MetaStock column 8 setting nn the “Customize the Data Field”

Step 3: Convert EOD data into MetaStock Format

After generating EOD data, we are ready to convert it into MetaStock format. First, launch the conversion utility. Following is a sample screenshot that you will see after launching the conversion utility:



The setting is very straightforward. Simply choose your source directory and destination directory, and then hit the “Convert” button.

Stock Market Browser Available Now

 
Stock Market Browser (SMB) version 1.00 is released! ! This tool provides you a unique way to find investment opportunity. We believe that the sector and industry the company you are interested in investing is important as well. That’s the reason why Stock Market Browser is useful. Based on your investment goal, you might be interested in owning companies in a particular sector and industry. With Stock Market Browser, you can not only browse the list of companies that are within a particular sector and industry, but also you can setup the screen criteria based on P/E, ROE %, market cap, dividend yield, debt to equity ratio, P/B, Net profit margin, and price to free cash flow to get the specific company within that industry.  The screened result can be exported to .csv format for further post processing you like.  If you want to know more about the particular company, simply double clicking the symbol to bring out detailed information to make your investment decision easier.
 

Main Features

· Only one time purchase fee, no further subscription fee

· Free upgrade for future release

· provide the price up number and the percentage to measure the overall market, sector, and industry performance

· Instantly monitor 9 sectors, 215 industries, more than 6000 publicly traded stock

· Screen the companies based on P/E, ROE %, dividend yield, debt to equity ratio, P/B, Net profit margin, and price to free cash flow within an industry

· In-software edit capability allows you to rearrange the data before exporting it .csv format

· In-software symbol query capability

· Detailed information such as profile, news, and chart is provided for selected symbol


You can access the complete documentation here. Also we provide the trial version with absolutely no cost to you. Try it now and tell us what you think. We would be more than happy to get any feedback or suggestion from you!

Stock Fundamental Data Download V 1.23 Available Now

We are pleased to announce that the Stock Fundamental Data Download (SFDD) version 1.23 is released! ! If you have purchased this software before, you can upgrade to the latest version simply by login to your account and reinstall the file.

What’s New in Version 1.23

Solve the Administration Issue

Before the version 1.23, the data and software application directories are in the same directory. Take Windows 7 users for example, if you install the software by default settings, it will be installed under the directory “Program Files (x86)”. By this way, you have to choose the option “Run as administrator” to start the Stock Historical Data Download in order to save the .slist and .set files as well as data output files under the installed directory
With version 1.23, the data directories are installed under User specific “My Document” directory so the administration issue is avoided.

Users Can Browse the Selected Symbol’s Profile and News

Following is newly designed main window screenshot.



If you are interested in one particular symbol and would like to learn more about it and its recent news, simply double click that particular symbol and its related profile and news will be shown on the bottom window. You can also click the news you are interested to read the full article in the web browser
We provide the trial version with absolutely no cost to you. Try it now and tell us what you think. We would be more than happy to get any feedback or suggestion from you!

PE and PEG Ratio

PE ratio probably is one of the most wildly used ratios for investors to make the investment decision. The reason might be because it is easy to understand and it simplifies the decision making. However, it might be misleading by only looking at the PE ratio

What is PE Ratio?

PE ratio stands for price-to-earnings ratio. It is the current stock price divided by the annual net income (earnings) per share (EPS). For example, if stock XYZ is trading at $20 and its annual earnings per share is $2, the PE ratio would be $20/$2 = 10

Implication of PE Ratio

PE Ratio is usually used to compare to the yield of other investment alternatives. From investors’ point of view, when they buy a stock with PE ratio 10, it can be treated that this investment has annual return on investment 10% (you paid $20 for a stock that can earn $2 in a year). With that mindset, you can compare to other investment alternatives to determine the relative attractiveness. (Remember the article Market Risk Premium 101?)

You can also compare the stock’s current PE ratio to its historical PE ratio to get a sense whether the stock is relatively cheap at this point of time. For example, if stock XYZ was trading at PE 100 last year but is currently trading at PE 10, it seems this stock is relatively cheap at this point of time

Can’t Make Investment Decision by PE Alone

However, there are traps here by making investment decision purely using PE ratio:
1. Stock price fluctuates all the time: Even though we say that PE ratio 10 can be treated the same as 10% annual yield, there is no guarantee the stock price won’t go down. It is possible that stock XYZ is trading at $20 now with PE ratio 10 but goes down to $10 after one year. Besides that, depends on the company policy, you don’t really benefit immediately from $2 earnings if the company doesn’t pay any dividend

2. Earnings fluctuate year over year: Even though a stock might seem to be expensive at this point of time, that doesn’t automatically make it a poor buy. The trap here is that earnings will change year over year. For example: if stock XYZ has average PE ratio 10 historically and is currently trading at $20 with past 12 month earnings $1, its PE ratio is 20. It seems to be expensive now. Suppose this company is doing very well for the next year so that after one year, its past 12 month earnings increased to $2.5. If stock price is still trading $20, its PE ratio changes to 8. If we have crystal ball to tell us the company XYZ is going to have earnings $2.5 for the next year, that will make this stock’s current trading price ($20) a good buy. Unfortunately, no one has crystal ball.

Important of the Expectation of Earnings Growth Rate

From the above example, not only PE ratio but also the expectation of the future earnings growth rate will affect the stock price. If investors believe that the company XYZ is going to have high earnings growth rate, they might be willing to pay higher price to own its stock even that means buy at high PE ratio. On the other hand, if investors believe that the company XYZ is going to have slow or negative earnings growth rate, PE ratio of that company’s stock tends to be low. As you can see, because no one has crystal ball, it is the “expectation”, not the “real”, future earnings growth rate that drive the stock price up and down.

Introduction to PEG Ratio

PEG ratio of a particular stock is its PE ratio divided by its expected annual EPS growth rate, as a percentage. The rationale behind this calculation is that if stock is trading at high PE, it is expected to have high EPS growth rate, and vice versa. For example: if stock XYZ currently is trading at PE ratio 10 and its expected EPS growth rate is 10%, the PEG ratio of stock XYZ is 10/10 = 1. Because PEG ratio take stock’s annual EPS growth rate into consideration, many investors use PEG ratio to determine if a stock is under or overvalued. The lower the PEG ratio, the better (more undervalued) the stock is (same PE with high EPS growth rate or same EPS growth rate with low PE).

In Practice

We can use Stock Fundamental Data Download to see the current PEG ratio distribution of companies listed in Down Jones. The PEG ratio number is extracted from Yahoo Finance. It is based on the expectation of the next 5 years growth rate. Following is the result sorted by PEG Ratio.



As of today (02/16/2012) GM has the lowest PEG ratio (0.41) while T has the highest PEG ratio (3.39) among Down Jones stocks. If you pay attention to the dividend yield, you see that in general companies have low PEG ratio pays little dividends compared to companies have high PEG ratio. It is obvious that there is always a tradeoff in terms of investment. The final decisions really depend on your ultimate goal, which could be different among individuals.

Let us emphasize one more time, No matter what the data source is, the annual EPS growth rate you see is the “expected” number because no one can foresee what will happen in the future. That’s the reason why you will see the dramatic price movement of some stocks after the earning is announced.

Stock Historical Data Download V1.63 is Available Now

 
Stock Historical Data Download version 1.63 is released! If you have purchased this software before, you can upgrade to the latest version simply by login to your account and reinstall the file. This release is mainly to solve the administration issue.

Before the version 1.63, the data and software application directories are in the same directory. Take Windows 7 users for example, if you install the software by default settings, it will be installed under the directory “Program Files (x86)”. By this way, you have to choose the option “Run as administrator” to start the Stock Historical Data Download in order to save the .slist and .set files as well as data output files under the installed directory

With version 1.63, the data directories are installed under User specific “My Document” directory so the administration issue is avoided.

If you haven’t purchased the Stock Historical Data Download, you can download the trial version here.

Ex-Dividend Date and Dividend Pay Date

In the previous article Introduction to Dividend Yield, we talked about several investment strategies that are based on dividend yield. Since part of the strategies are based on the amount of dividend you receives, it is important to know the difference between stock ex-dividend date and dividend pay date. the reason is that because stocks are constantly traded and hence the ownerships are constantly changed. Joe bought stock XYZ in Jan, 1 and sold it in Feb, 1 to Mary. In Mar, 1, Mary sold it to Peter. If stock XYZ is going to pay the dividend in April, 1, Who is in title to receive the dividend?

What is Ex-Dividend Date

The ex-dividend date sometimes is called the reinvestment date.  It is the date to determine if you will be in title to receive the dividend of the stock you own. The official definition from IRS is “the first date following the declaration of a dividend on which the buyer of a stock is not entitled to receive the next dividend payment”. Probably you are still confused. Simply put, it means that if want to be in title to receive the dividend of the stock XYZ, you have to buy this stock before ex-dividend date. If you buy the stock XYZ on or after ex-dividend date, you won’t be in title to receive the dividend.

What is Dividend Pay Date

In terms of dividend pay date, it is much straightforward. It is the date that dividend is actually paid to the stock owner that are in title to receive the dividend

In Practice

In the previous article Introduction to Dividend Yield, we mentioned about the strategy that invests in stocks that have the highest dividend yield. By using Stock Fundamental Data Download, we can sort the stock by its dividend yield as following



So currently stock T (AT&T) has the highest dividend yield among Dow Jones stocks with Ex-Dividend Date Jan, 6 and Dividend Pay Date Feb, 1. That means if you want to be in title to receive the next dividend payment paid by AT&T in Feb, 1, you have to buy the stock before Jan, 6
You might think about buy AT&T stock in Jan, 5 then sell in Jan, 6. In that way, you can receive the next dividend simply by holding the stock one day. However, because it is public information and everyone knows about it, the stock price already factors in this information so when you try to sell AT&T stock in Jan, 6. the stock price should have already reduced by the dividend amount that is going to be paid in Feb, 1

Introduction to Dividend Yield

Simply put, dividend yield is the amount of annual dividends per share divided by the stock price per share. For example, if a company pays annual dividend $5 and currently the company’s stock is trading at $50, the dividend yield is 5/50 = 10%. Many investors prefer high dividend yield stock rather than high growth stock without dividend payment. The reason is because in general it seems to be safe to hold high dividend yield stock especially when the outlook of the economy is uncertain. Think about it: The only way to profit by investing in the stock that doesn’t pay the dividend is through the stock price appreciation. However, investors can profit from high dividend yield stock simply by receiving the dividends. It is very attractive when everyone thinks the economy won’t be good in the near future.

Dividend Yield Strategies

There are several investment strategies that we can consider by applying dividend yield concept

Dogs of the Dow

Dogs of the Down is a simple strategy that suitable for investors that prefer high dividend yield with passive investment style. Here is how it works: At the beginning of the year, you choose the top 10 highest dividend yield stock in Dow Jones and invest the equal amount of money into each one. By the end of the year you liquidate it and repeat the same process for the next year
You can find the list of Dogs of the Dow for 2012 here
Also you can use the Stock Fundamental Data Download to list the stock from highest dividend yield to lowest dividend yield among Dow Jones stock.



You can also include the ex-dividend date and dividend pay date information. The list is not the same as the list for Dogs of the Down 2012 because it is based on the latest trading data as of Jan, 31, 2012
 

Vertical Sorting of Dividend Yield

Another way is to sort the dividend yield by the segment. Take SPY, which is the S&P 500 index ETF for example, we can dissect SPY into following segment: XLE (Energy), XLF (Finance), XLI (Industry), XLK (Technology), XLU (Utility), XLP (Consumer Staples), XLV (Health Care), XLY (Consumer Discretionary).  Simply load those symbols into Stock Fundamental Data Download and sort them by the dividend yield. Result is as following:



The result shows XLU (utility) has the highest dividend yield and XLK (technology) has the lowest dividend yield

Horizontal Sorting of Dividend Yield

You can also sort the dividend yield horizontally. For example, you might be interested in investing in different countries and wonder what the dividend yield is for each of the country.
Here is an example that we can sort by dividend yield among following 19 countries.



As you can see, among the listed countries, EWP (MSCI Span Index) has the highest dividend yield (9.47%), almost 10%! This high dividend yield reflect the fact that currently investors are not confident in regarding the current debt issue Span is facing

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Comparing the Volatility across Different Assets

 
In the previous article, we showed the steps that everyone can calculate the volatility for particular a particular stock/ETF he or she is interested in. So what’s the general volatility of other assets that we are interested in? In this article, we are going to compare the volatility among four popular assets: equity market, corporate bond, real estate, and gold
 

Popular ETF to Represent Those Assets

Before the invention of ETF, individuals are hard to diversify their portfolio to different asset classes. However, with the increasingly popularity of the ETF, It is easy to get the specific risk exposure you prefer. If you want to get the corporate bond exposure, you can simply buy the corresponding corporate bond ETF just like you buy other stocks. The creation of ETF really helps the individual investors diversify their portfolio without mutual fund managers. Here is the ETF that we are going to use as a practice to measure the volatility for different assets:
Equity Market: SPY
Corporate Bond: LQD
Real Estate: IYR
Gold: GLD
 

Results

As usual, you can use Stock Historical Download or Yahoo Finance to download the historical price to calculate the volatility. The data range we choose is between Jan, 2005 and Jan, 2012. The reason is that because gold ETF GLD was not created until 2005. Different intervals such as 7 years, 5 years, and 3 years are calculated to see the volatility difference among different intervals


As we can see, different asset classes do have different volatility characteristic while the interval chosen to calculate the volatility has small impact in terms of volatility.
It shows that actually real estate (IYR) has the highest volatility, following by gold (GLD), then stock market (SPY). Corporate bond (LQD) has the lowest volatility.  It affirms our general expectation that the risk of bond is lower than stock. On the other hand, the reason why real estate has the highest volatility, which is somewhat contradictory to the traditional view treating real estate investment as a safe investment, might be something to do with the subprime mortgage crisis.

We can also plot the annualized return comparison among those assets


Unlike volatility, the annualized return does fluctuate a lot for different intervals, especially the stock market and real estate. It shows us how difficult it is to profit from timing stock market

Stock Fundamental Data Download Available Now

We are pleased to announce that the Stock Fundamental Data Download (SFDD) version 1.0 is released! Wondering which stock you are interested in has the lowest PE ratio? How about PB and PS ratio? Which stock has highest earning growth rate potential? Stock Fundamental Data Download provides the solution for you!

Stock Fundamental Data Download (SFDD) can download the fundamental data for the stock symbols that are listed in Yahoo Finance and save it as .csv format. You are able to create your own symbol list and define the data fields you would like to download (currently there are more than 30 data fields supported and more to come). Also SFDD allows you to edit and sort the data downloaded on the fly before you export the data. You can access the complete document here.
 

Main Features

· Only one time purchase fee, no further subscription fee
· Free upgrade for future release
· Batch downloads the symbol lists defined by you.
· Support more than 30 data fields, and more is coming
· In-software edit capability allows you to rearrange the data before exporting it
· Support various stock exchanges
· Define your own data field to download
· output data is plain ASCII text with comma separated csv format

We provide the trial version with absolutely no cost to you. Try it now and tell us what you think. We would be more than happy to get any feedback or suggestion from you!

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Measuring the Risk - Volatility

 
When it comes to investment, in addition to the return on the investment, the other thing that we are always interested in knowing is that how much risk we are taking to make a specific investment. But exactly what is risk? How can we quantify the risk?

Risk VS. Uncertainty

Although there is no clear distinction between the risk and uncertainty, we can use Frank Knight’s distinction as the starting point: Risk has an unknown outcome, but we know what the underlying outcome distribution looks like. Uncertainty also implies an unknown outcome, but we don’t know what the underlying distribution looks like. For example: Amazon is going to announce its fourth quarter earnings in January 31, 2012. As of writing, we don’t know what the price movement of amazon stock is after the earning is announced, but we do have the past history to measure the likelihood of the price movement after earning is announced. That’s the risk. On the other hand, current European sovereign debt crisis posts an uncertainty for us because the outcome is unknown and there is no past history for us to gauge the likelihood of the outcome

Measuring the Volatility of the Stock as the Risk

Although there is no way to measure the uncertainty of a particular stock, we can measure the volatility of the stock according to the past history of price movement to represent the risk of investing in the stock. The volatility of the stock is simply the standard deviation of the price movement for a certain period of time:

Calculate the Risk of the Market (S&P 500)

You can calculate the risk of the market (S&P 500) or any particular stock/ETF you are interested in by following steps:
1. Get the stock historical price data: Use Stock Historical Data Download to download the past 10 years, monthly price movement for symbol S&P 500 (^GSPC)
2. Calculate the monthly price % change based on the monthly price movement
3. Uses the Excel function (STDEV.S) to calculate the volatility for you. Remember you have to times the number by sqrt(12) to make it annualized volatility
You can download the sample excel here
Following is the S&P 500 volatility distribution based on last 10 years, 5 years, 3 years, and 1 year data

The volatility ranged from 16% to 18.9%.
As we can see, the volatility of the stock changes if we use the different intervals of past history
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New Version of Stock Historical Data Download Available Now

We are pleased to announce that the Stock Historical Data Download version 1.6 is released! If you have purchased this software before, you can upgrade to the latest version simply by login to your account and reinstall the file. New features in the latest version includes the integration of the command mode and the capability to save/load .set file directly from Setting Window

Integration of the Command Mode

Stock Historical Data Download supports command line argument to achieve the fully automation. It is done by reading the symbol list file (.slist), which includes the symbols going to be downloaded, and the setting file (.set), which includes the setting options that are going to be loaded to setting window.

Create/Load Symbol List file

We recommend you to create/load symbol list file (.slist) by following steps:
1. Add the symbols you want to save in the .slist file, then chose File->Save File->Symbol List from main window to save the list into the file
2. To load the saved .slist file, simply choose the file from File->Open->Symbol List from main window

Create/Load Setting File

We recommend you to create/load setting file by following step:
1. In the setting window, choose the setting you would like to save, then click OK
2. In the main window, choose File->Save File-> Setting to save the current setting into .set setting file. Note the data field information will also be saved
3. To load the saved .set file, simply choose the file from File->Open->Setting

Use the Command mode

Stock Historical Data Download supports the command mode by directly activating the exe file “StockDataDownload.exe” from the Windows console. Following is the sample screenshot of the command mode window:



You can find the executable from the installation directory. The command mode has the general format:
StockDataDownload.exe -s “slist file” -o “setting file” [-q]
“slist file” is the target symbol list file.
“setting file” is the predefined setting file
if –q option is specified, the command mode window will be automatically exist when the task is done otherwise you have to hit the Quit button to exist the window
You have to specify both files to make the command mode work

Directly Save/Load .set file from Setting Window

Following is the sample screenshot of the Setting Window for version 1.6



At the Bottom of the window there are Save/Load buttons that allows you to directly save/load .set file from the Setting Window. It is more convenient!



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Market Risk Premium 101

Introduction

When comes to the investment, we might measure the performance of the investment by its nominal return. For example, if the stock you bought in year 1 yields a return 12%, then probably you think this stock is good one to own. On the other hand, if it simply yields a return about 7% in year 2, then you might feel not so good compared to 12% return. However, if further information is revealed that in year 1 the 10-year US treasury bond could give you 8% and in year 2 the 10-year US treasury bond has only 1%, do you still think 12% is better than 7%?
 

High Risk, High Reward

When making the decision in terms of what financial instrument to invest, we are trying to put the money in the one that can give us the best return on investment per risk we take. The main reason why people invest their money in the stock market rather than in the US Treasury bond is because historically it gives us higher return on investment. The reason why we expect to get higher return on investment from stock is because of the fluctuation of the stock price that we might end up losing the principle. With the additional risk we take, extra return is needed to justify investment. It is obvious that if we can get the same return on investment as stock market by investing the money into the US Treasury bond, no one would invest any money into the stock market.
 

Market Risk Premium, the excess return above the risk-free rate

Because of this reason, we are more interested in knowing what’s the excess return above the risk-free rate rather than the nominal return. Take the hypothetical example we mentioned at the beginning, in year 1, the excess return above the risk-free rate would be 12% - 8% = 4%. However, in year 2, the excess return above the risk-free rate would be 7% - 1% = 6%. Actually the stock market performs better in year 2 than in year 1!
 

Estimate the Market Risk Premium

The formula to estimate the market risk premium is simple:
Market Risk Premium = market total return – risk free rate, while market return would be:
(Market Price End – Market Price Beginning + Total Dividend Received) / (Market Price Beginning)
 

Use the Free Data to Calculate the Market Risk Premium Yourself

It would be nice if we can calculate the market risk premium ourselves to get a feel how much excess return do we get in average. Luckily, there are many free data on the internet that we can utilize. Below would be the steps you can follow:^
1. Get SPY ETF historical data: Typically we use S&P 500 index to represent the market. However, it doesn’t have dividend information, so we use SPY, which is the ETF of S&P 500 index to calculate the total market return. You can simply go to Yahoo Finance website to get the data or simply use Stock Historical Data Download to download it for you. Download both monthly quotes and dividend from 1993 to 2012
2. Get ^TNX historical data from Yahoo Finance: the ^TNX historical prices represent the 10-year US Treasury yield. We can use it to represent our risk-free interest rate
3. After putting those data together, we can summarize the result as following:

Year	SPY Begin Price	SPY End Price	Dividend	Total SPY Return	10-Year US Treasury	MRP
1993	31.29	35.24	1.183	16.40%	6.39%	10.01%
1994	35.24	35.51	1.462	4.91%	5.64%	-0.73%
1995	35.51	49.1	1.243	41.77%	7.59%	34.18%
1996	49.1	61.33	0.972	26.89%	5.58%	21.31%
1997	61.33	78.09	1.375	29.57%	6.50%	23.07%
1998	78.09	102.7	1.392	33.30%	5.51%	27.79%
1999	102.7	113.45	1.414	11.84%	4.65%	7.19%
2000	113.45	112.52	1.454	0.46%	6.67%	-6.21%
2001	112.52	93.81	1.032	-15.71%	5.18%	-20.89%
2002	93.81	72.46	1.498	-21.16%	5.03%	-26.19%
2003	72.46	97.11	1.63	36.27%	3.97%	32.30%
2004	97.11	103.05	2.197	8.38%	4.14%	4.24%
2005	103.05	113.15	2.149	11.89%	4.13%	7.76%
2006	113.15	129.93	2.446	16.99%	4.53%	12.46%
2007	129.93	126.46	2.701	-0.59%	4.83%	-5.42%
2008	126.46	78.09	2.721	-36.10%	3.64%	-39.74%
2009	78.09	103.58	2.177	35.43%	2.84%	32.59%
2010	103.58	126.04	1.786	23.41%	3.61%	19.80%
2011	126.04	128.02	2.576	3.61%	3.38%	0.23%
Average						7.04%

From year 1993 to 2011, the market risk premium in average is 7.04%. That means if we invest our money into the stock market during this period instead of 10-year US Treasury bond, the excess return we expect to get is 7.04% annually. However, if we look at the plot, the market risk premium is quite different each year.
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Generate MetaStock ASCII Format by Stock Historical Data Download (SHDD)

Introduction

MetaStock is a stock charting and technical analysis tools created by Equis International. In order to use this tool, there are two necessary components: The MetaStock software itself and the data service. However, data service subscription is not cheap. If you are MetaStock End-Of-Day user, it costs you $59/month for only North American Subscription Package. Another feasible option would be purchasing MetaStock End-Of-Day software and using SHDD to provide you the data.

How it works

it is simple. First, you use SHDD to generate MetaStock ASCII format, and then use the tool DownLoader provided by MetaStock software to covert ASCII to final MetaStock format.

What is MetaStock ASCII Format

Depends on the version of the MetaStock software you are using, there are different ASCII format:

1. MetaStock ASCII (7 column): The sample format will look like this:

INTC,20111212,24.18,24.29,23.61,24,94839500

INTC,20111213,24.06,24.06,23.42,23.56,78518900

INTC,20111214,23.48,23.56,23.14,23.31,56394300

Column 1: Symbol

Column 2: Date

Column 3: Open

Column 4: High

Column 5: Low

Column 6: Close

Column 7: Volume

2. MetaStock ASCII (8 column): The sample format will look like this:

INTC,D,20111212,24.18,24.29,23.61,24,94839500

INTC,D,20111213,24.06,24.06,23.42,23.56,78518900

INTC,D,20111214,23.48,23.56,23.14,23.31,56394300

As you can see, it is similar to ASCII (7 column) format. The only difference is that there is an extra column to represent the bar duration. It is usually D for day.

Settings to Generate MetaStock ASCII Format

For the complete doc about Stock Historical Data Download, please click here.

You can achieve this easily by editing the setting window:

1. MetaStock ASCII (7 column)

a. Set the Date Format as following:



You can check the Add Header if you want the header to be in the data

b. Customize the Data Field:



You can save the current setting and load it next time to save the time

2. MetaStock ASCII (8 column): It is similar to MetaStock ASCII (7 column) setting with following column setting:



That’s it!

As of writing, the most recent version of SHDD is 1.5. Please always use the latest version.

Actually not only MetaStock format, but virtually any format can be generated by SHDD as long as the total columns are less than 8. If you have any specific format that would like us to support, please let us know and we will implement it for you for the next release.

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