How To Use The New Investment Figures PageJeffrey M. Laderman
It's a steamy stock market out there, rife with opportunity--and danger. That's why we have revamped our Investment Figures of the Week to give investors new tools to monitor the markets and manage their money.
One new feature is Bloomberg Money Flow Analysis, a system that tracks every trade of less than 10,000 shares in exchange-listed and over-the-counter stocks. The object of this analysis is to find stocks whose price performance is weak but whose shares are being snapped up nonetheless. Those stocks can make good buys, since often the price will turn and follow the money. Conversely, stocks with positive price performance but negative money flows may be headed south.
The screen works like this: Suppose 1,000 shares of a $25 stock trade up 1/4 (25 cents), and on the next trade, 200 shares sell down 1/4, and on the third trade, 200 shares change hands as the stock falls another 1/4. For the three trades, the shares are down 1/4, but more money has flowed into the stock ($25,250) than out ($9,950) for a net inflow of $15,300. If this pattern is repeated over the span of a month, the net inflow can run into the millions. The greater the inflow, the more likely it is to appear on our weekly list.
Earnings are an important driver of stock prices, and so are the expectations of what those earnings will be. Positive surprises are bullish for stocks; negative surprises, bearish. First Call Earnings Surprise, a new feature under "Fundamentals," shows how much better or worse reported quarterly profits are from what Wall Street analysts were anticipating. This week, for instance, that figure is 2.5%, meaning that on average, earnings for the last quarter are beating expectations by 2.5%. The Earnings Surprise figure will appear during the third through ninth week of each quarter. At other times, as in the example (right), we'll report First Call Earnings Revision, which will show whether analysts are raising or lowering their profit forecasts for the next earnings period and by how much.
We also increased the number of broader market barometers and added more specialized indexes. One such index, the Bloomberg Information Age Index under "Markets & Sectors," consists of 100 leading U.S. companies that create the infrastructure and content for our digital society. Market indexes for Frankfurt, Hong Kong, and Mexico City have also joined the list. We also expanded mutual-fund leaders and laggards.
There's more to investing than stocks. Consider municipal bonds. Bloomberg Muni Yield Equivalents, another new feature, takes AAA yields in the tax-exempt market, compares them with U.S. Treasury bonds of a like maturity, and computes a taxable equivalent. For example, a 30-year AAA general obligation bond with a 5.45% yield is the equivalent of 7.90% in a taxable bond. That's far higher than the 6.44% yield on the 30-year U.S. bond, making munis an attractive buy for many investors.