FYI | Apr 28 2017
One of many changes we introduced on the new website is the extended usage of FNArena price charts. Apart from Stock Analysis, where price charts are an integral part of the suite in data, news and experts views facilitating research into ASX-listed stocks, FNArena news stories now display the same charts at the bottom of news stories for every ASX-listed company mentioned.
This is generating a number of questions from investors who, perhaps, are not as yet familiar with the data available through Stock Analysis.
FNArena distinguishes itself from most other financial data and analysis providers in that we collate and generate our own proprietary data. The consensus price targets, the consensus forecasts and the consensus views that are available through the FNArena website are all unique to our service.
The same applies to the price charts in which we incorporate some of the key data to assess the status/outlook for a given stock. As such, every FNArena price chart also shows position and evolution of consensus price target, in addition to the 60 and 200 days moving averages. The consensus price target is shown through a grey-ish background, while a blue and red line show the two mathematical price trends.
Equally important, and sometimes triggering questions, is that the top bar of the price chart also displays the most recent values for each. In other words: the number behind SMA (60) indicate where the blue trend line currently sits. The number behind SMA (200) shows the positioning of the red trend line. The number behind Cons Target shows the exact calculation for FNArena's consensus target.
Underneath each price chart sits a second window, usually showing two horizontal trending lines, one yellow and one red, interrupted by one vertical bar stating "New Financial Year". These are FNArena's consensus forecasts for earnings per share (EPS) for Year-1 and Year-2. Note that as companies release their actual financial results, these forecasts move up by one year respectively.
In other words: the Year-1 forecast to the left of the "New Financial Year" expires upon release of financial results, but Year-2 then becomes Year-1 into the new financial year.
There are many observations that can be made from these price charts that can assist investors with their research and their assessment. Is the trend in consensus price targets up or down? Does the red line for "EPS2" remain above the yellow line for Year-1 EPS? Is divergence occurring between share price and consensus forecasts?
While these are all potentially interesting, if not important inputs, investors should at all times keep in mind that sometimes the market leads and stockbroking analysts might have to catch up, while in other times the market simply ignores and then finds it needs to catch up with what no longer can be ignored.
There are no silver bullets when it comes to investing in the share market, but day-to-day observations, accumulated experience and in-depth analysis and research can make a huge difference.
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