Financial Research on the Web

By kfreelskfreels (1261533295|%a, %b %e at %I:%M%p)

One important aspect of doing industry research is to understand the financials of the industry and individual firms. Two web-based tools, Wikinvest and Wolfram Alpha, are free and easy to use sites that are immensely helpful for doing financial data research on the web. In this blog post, I will describe how to use each site and what you can learn from them for your research.

Wikinvest

wiki.jpg

This tool wasn't covered in BIT 330, but I honestly think it's one of the most useful tools on the internet for business and financial research. I discovered it while researching the Fast Food industry and it will be my go-to source from here on out. And as its name suggests, Wikinvest is the Wikipedia of investing. Hundreds of thousands of contributors, from everyday investors to industry experts, have created an online reference covering a variety of investing topics: individual companies, industry analysis, commodity monitoring, investing funds, global markets, and even basic personal finance advice. While you should spend time exploring all of these features on Wikinvest, for the purposes of this blog post I will focus on demonstrating and evaluating the industry and individual company analysis features.

Industry Research

Wikinvest offers industry analysis on over 80 industries, a list of which you can find here. The Fast Food Restaurants wiki is incredibly informative, comprehensive, and up-to-date.

The wiki includes a general background and description of the industry, followed by a breakdown of the composition of the industry, explanation of industry trends and forces, and links to the company wikis of the industry. There is also a section for recent news in the industry on the right column. Additionally, the Data tab includes a table listing the Fast Food Restaurants with comparable data metrics. The user can choose the time period and which metrics are shown.

What can the industry analysis be used for? For one, it can be used to monitor the trends in the industry. For example, the wiki currently highlights the US spending slowdown, rising food prices, international expansion, health and wellness concerns, and the rising threat of fast casual restaurants as the trends in the fast food industry. Second, if you were putting together an industry report or needed information on industry competition for a particular company, the Data tab on Wikinvest would allow you to pick the important metrics, the time period, and assemble a table of all the information you need.

Company Research

wiki2.jpg

The company wikis on Wikinvest are even more useful than the industry wiki. As you can see in the image above, the company wikis are organized into three main categories, Analysis, Data, and Financials. There's a ton of information on the wiki, so I will just cover the highlights.

Business Overview

The Business Overview section can be found on the Summary page in the Analysis category of a company wiki. For the purposes of demonstrating these features, I'll be using Burger King Holdings' (BKC) wiki. Within the Business Overview, Wikinvest provides an in-depth description of the following:

  • The company's financial results
      • For example, from BKC's wiki I learned that "in FY 2008, Burger King increased revenue by 10% to $2,455 million from $2,234 million the previous year." This section also provides info on why revenue increased, its affect on net income, a graphical representation of the figures from 2006 to 2008.
  • Various business segments
        • This section outlined the three geographical segments that BKC operate in.
  • Quarterly financial results
          • This section gives the most up-to-date quarterly financial figures. For example, I learned that "BKC reported revenue for Q4 2009 (ending 6-30-09) of $629.9 million, a decline of 2% from the same quarter in 2008". It also provided me with a description of strategic operations.
Data Central Analysis

The Data Central tab is by far the coolest part of Wikinvest. It's really fun to play around with, and it's incredibly helpful! At the top of the page there's a drop down box that lets you decide what you'd like the key metrics for BKC to be compared to. The options are: top competitors, fast food, fast food restaurants, fast food restaurants (QSR) or food and beverage. Basically, it allows you to compare BKC on a narrow scope to its top competitors up to a broader scope against the food and beverage industry as a whole. The Data Central tab presents six different kinds of data:

Industry Metrics

  • This section lists BKC's key metrics and rates the as average, high, or low compared to its top competitors, or whatever other comparison the user elected to use. There's also a bar chart that lets the user look through key metrics and visualize how BKC stands up against its competitors. Additionally, be mousing over the name of the metric or the comparative rating, Wikinvest shows a graph or chart giving more details about BKC's fianncial position. For example, I learned that the number of total restaurants has steadily increased since 2005 by mousing over the Total Restaurants metric, and that BKC is in the 47th percentile in terms of sales per restaurant.
  • Another great feature of Wikinvest is that every graph and chart has an embedding function that provides the user with an HTML code to embed the image on their own site.
ind.PNG

Stock Summary

  • The Stock Summary lists the opening price, day range, 52 week range, volume, average volume over 3 months, number of shares outstanding, and market cap for BKC stock.
  • A huge advantage of Wikinvest is that if you don't know what a financial metric is or how it's measured, Wikinvest has a Definitions page that clearly explains, in layman's terms, what the metric is. Here's the Definition wiki for "Market Capitalization"

Income Statement

  • The setup of the Income Statement section is much like the Industry Analysis in the image above; certain key Income Statement metrics are listed for BKC and are rated as average, high, or low compared to its top competitors. Next to that is the bar chart that allows you to visualize how BKC stacks up against its competitors for several metrics, in different time periods.
  • If you click on "See All" at the top of the section, Wikinvest navigates you to the full Income Statement page in the Financials category of the BKC wiki.

Balance Sheet

  • This section again lists key metrics from BKC's Balance Sheet and rates it in comparison to competitors. Then, it summarizes the Balance Sheet in an easy to read format by listing total assets, liabilities, and equity for BKC, as seen in the image below.
balance.PNG

Valuation

  • This section lists key valuation metrics including: P/E Ratio, P/B Ratio, P/S Ratio, ROA, ROE, EBITDA, and Dividend Yield.

Analyst Recommendations

  • This section shows analyst recommendations regarding BKC stock compares to their recommendations about stocks of the fast food industry in general.
analyst.PNG

Wolfram Alpha

wolfram.jpg

Wolfram Alpha is a "knowledge engine", that attempts to answer the question it thinks you're asking with the data it has available. While Wolfram Alpha has really only one useful feature for industry analysis, its ability to quickly, succinctly deliver accurate financial data for a company in easy-to-read table and graph form are worth trying out.

In the Financials table, shown below, the user can click on the drop down menu and see all the options for financial data, including: Fundamentals, Ratios, annual or quarterly Balance Sheet, annual or quarterly Income Statement, and annual or quarterly Cash Flow Statement. In addition to this table, Wolfram Alpha has a customizable graph depicting stock price history, performance comparison chart and correlation matrix for the company's stock against its competitors and the market average, and a graph that shows projections for the company's stock 1 month and 1 year out. This information is standard with any company you search for on Wolfram Alpha.

Another really useful feature of Wolfram Alpha is to compare two different public companies. By typing in two companies' names, like {wendy's mcdonald's} in the seach box, I can see all the data for both companies laid out in easy-to-compare tables, and the stock charts compare the prices of both firms.

wen.PNG

Conclusion

Wikinvest and Wolfram Alpha are great tools, but serve different purposes. I would use Wikinvest if I was preparing am industry outlook report, and wanted to understand exactly how my company sized up against its competitors, how its financials have fared over time, and what strategic choices the company has made to get where it is today. Wolfram Alpha, on the other hand, should be used as a quick reference. I would use this if I were summoned into a meeting with my Manager and the CFO of a company who needed to know, immediately, what the annual dividends per share was for their biggest competitor.
Overall, I think these are both excellent tools that should be used weekly, if not daily, while researching an industry like the US Fast Food industry.

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License