Below are guidelines for researching companies for the investment club. Keep in mind that you are not required to follow the steps exactly as presented here. You may come up with ways to tailor the procedure to work better for you. The goal is to find investment opportunties that meet the criteria in our Policy Manual and to gather information so other members can make informed decisions. Talk with other team members to understand which criteria are most important. If you discover new data sources or improved research methods, please add a comment to the suggestion box or send a note to Steve Fulton.

1. Log into the broker account. The user ID and password both end with "1234". Select Research & Ideas / Screeners. Click "FVIT Tight". If the following steps eliminate all of the candidate stocks, try again with "FVIT Loose". You may find it helpful to copy-paste the table from the web page into Excel.
   
   
2. Go to Yahoo and look at a 1-year chart for each stock. You can enter several stocks at a time into the entry box labeled Get Basic Charts by separating the ticker symbols with spaces. Eliminate stocks that have been trading for less than two years or have a 2-year high below 15. Eliminate stocks that are not in a base. This means you should eliminate stocks with a 2-year high that first occurred less than 2 months ago. Also eliminate stocks with any prices during the past 2 months that fell more than 35% below the 2-year high. (Quick calculation: half again the 2-month low price should be over the 2-year high.) For stocks that are in a base, give each a "chart quality grade" of A, B, or C. This is subjective. Good things to see in a chart are: multiple peaks near the 2-year high, moderate base depth of 15-25%, price movement that is not extremely volatile or erratic, and patterns as illustrated in the Policy Manual.
   
   
3. Go to Yahoo and inspect a 5-year chart for each remaining stock. Eliminate stocks that have been trading for less than 2 years. Eliminate stocks with significant overhead supply. This means prices higher than the 2-year high, especially if they occurred within the last 3 years or if the all-time high is less than 20% over the 2-year high. Adjust your chart quality grades if necessary. Good things to see in the long-term chart are a steadily rising price trend and additional peaks near, but not above, the 2-year high.
   
   
4. For the remaining stocks on your list, circle numbers great numbers in the screener: 3-year revenue growth >25%, EPS growth last quarter >40%, return on equity >15%, profit margin >15%, PE <20, volume >1,000,000.
   
   
5. Choose one to three stocks that look the best based on the chart quality and the numbers on the screen list. Research only these stocks as you continue with the remaining steps because they take more time. Eliminate a stock if you find a major problem number or accumulate too many questionable items.
   
   
6. Start up the Stock Cruncher program and enter data as you research the stock.
   
   
7. Retrieve a history of quarterly earnings per share and sales from yahoo.com/finance or google.com/finance or the web site of the company you are researching. Eliminate stocks with less than 15% increase in the last quarter EPS. Consider eliminating stocks with less than 10% increase in the last quarter sales. Consider eliminating stocks with an annual earnings growth rate of less than 10%. Consdier eliminating stocks with a very erratic earnings history. The best is a steadily rising earnings graph with recent acceleration.
   
   
8. Look up the EPS estimate for the next quarter at one of the above links and enter the data into Stock Cruncher. Use the adjustment buttons to mark the estimated earnings with e's. Consider eliminating stocks with estimated earnings increase of less than 20% for the next quarter. Enter estimates for the quarter after next if it is readily available.
   
   
9. Enter the exact 2-year high price and an approximate recent price using data from one of the above links. The high price is typically shown as a 52-week high, so check a chart to be sure the high point occurred during the past year. If it occurred the year before, you can look up the exact price on an interactive chart or historical price list on yahoo.com. Be sure the 2-year high is accurate, because it is used to calculate the buy signal. Consider eliminating stocks with an estimated break-out PEG higher than 1.3 as calculated by Stock Cruncher.
   
   
10. Enter the number of shares outstanding from one of the above links. The Stock Cruncher program should now calculate the FVIT Rating in the large box in the upper right corner. Eliminate stocks with a FVIT Rating below 50. Consider eliminating companies with a FVIT Rating below 60.
    
    
11. Retrieve the balance sheet and income data from one of the above links. Enter the data into the data sheet and check the automatically calculated financial analysis. Eliminate companies with long-term debt over 60%. Consider eliminating companies with long-term debt over 40% if the return on equity is below 10%. Consider eliminating companies with a return on equity or profit margin below 5%.
    
    
12. Read about the company's business, latest products, and news headlines. Take notes in Stock Cruncher. You can copy-and-paste text, but please edit for readability. Resist the temptation to skip this step, it is important. Choose the most significant item for the "key new development" entry. Consider eliminating companies that have nothing new to report.
    
    
13. Complete any remaining entries in Stock Cruncher by looking up data using the links above. If you don't have an Investor's Business Daily newspaper, it is ok to leave the IBD entries blank.
    
    
14. Save the Cruncher file and submit the stock for vote. Enter comments to highlight potential problem areas and indicate your proposal for long-term or short-term based on the criteria in the Policy Manual.
    
    
15. Register your own vote for the stock.
    
    
16. Good job! You will receive email if people add discussion comments. Respond to questions as needed.