Computercol/20″/dt1st/mark2nd
By BRIT HUME and T.R. REID
Tune your television to any cable channel reporting financial news and you will be bombarded with commercials for online brokerage houses, each seeming to boast of lower commissions and/or more information than the others. And the latest trend at these establishments is online trading, where you in effect can act as your own broker, making trades directly from your computer keyboard.
But these online brokerages are very much do-it-yourself operations, and there are reasons for their low commissions. One is that while you can get “real-time” (up to the minute) price quotes and certain other basic financial information from their Web sites, there is nothing comparable to the in-depth research that full-service brokers offer their customers. So the question is: Can a resourceful Web investor dig up such information free of charge elsewhere?
The answer seems to be yes, to some extent, but it’s not easy. For example, after seeing several sources, including Kiplinger’s Personal Finance magazine, recommend a midsize telecommunications company called ADC Telecommunications, we went surfing to see what we could find out.
From the investment pages at www.excite.com, we got basic information on the price of the stock, how it has fluctuated over the past year, and its current price-to-earnings ratio. We were also able to chart the stock prices over periods ranging from that day to 10 years. Excite’s financial information, which comes from Quicken.com, also included a concise profile of the company. But this told us very little except that ADC’s products and services help “customers to construct and upgrade their telecommunications networks to support increasing user demand.”
There was plenty of statistical information, but the company’s return on equity, an important measure for many investors, was not available. We were able to get this from another free site, www.Marketguide.com, which furnished all the same statistical details available on Excite, plus a similarly skimpy profile of the company. Unlike Excite’s profile, however, the Marketguide description of ADC did include a brief summary of the company’s recent sales and earnings.
There was one striking feature of ADC’s price chart over the past year. Unlike many stocks, which peaked just before the market turned down in July, ADC’s high for the past 52 weeks occurred last December when the stock climbed to the mid-forties, only to tumble all the way to the high teens before beginning a recovery. So the question was, why?
Nothing offered by Excite, or Marketguide, provided the answer.
Both have access to news stories, but these only go back a few months. CBS’s Marketwatch site offered a brief description of the company provided by Hoover’s but no clue as to the big drop last January. Hoover’s, the Texas-based company research firm, offers more extensive profiles at its Web site (www.hoovers.com) but you have to pay for them.
Another top source of investment research is Standard & Poor’s Web site, www.personalwealth.com, which is one of the best all-around financial sites on the Internet. It is a subscription site, $10 a month for the full range of its information, but users who merely sign up and obtain a password are entitled to at least sample the full menu of goods.
For example, S & P; offers extensive financial reports which it calls “Enhanced Analytics.” Registered, nonpaying users can get three of these a month at no charge. Paying subscribers get 10 of these reports a month, which S & P; is quick to tell you is a $50 value. These reports have all the market information you would expect, a summary of analysts’ ratings, plus informed analytical commentary on the stock in question, just the kind of thing an amateur investor looking for background wants.
And the S & P; “Enhanced Analytics” report on ADC Telecommunications had this to say about the company’s January nose dive: “The shares have rebounded sharply, after collapsing in early 1998, following several pre-announcements regarding a deceleration in near-term revenue growth. We viewed this drop as a short-term problem, as shown by strong results in both the second and third quarter.” Thank you, S & P.;
For the adventurous investor, there is another way to search for in-depth information and that is through one of the many stock message boards available on the Internet. One of the biggest is on Yahoo! (www.yahoo.com). We were able to find an extensive message thread on ADC and, like most such message boards, there was everything from thoughtful commentary and information to idiotic prattle. It’s not hard to see which is which, and sure enough there were messages dating back to January describing exactly what S & P; had mentioned in its report.
T.R. Reid is London bureau chief of the Washington Post. Brit Hume is managing editor of Fox News in Washington. You can reach them in care of the Washington Post Writers Group, 1150 15th St., Washington D.C. 20071-9200, or you can e-mail T.R. Reid at [email protected] and Brit Hume at [email protected].
