The SRC 12-Year Charts provide the investor with longer look at stock fundamentals – it’s this longer view that begins to show performance trends over time.
The 12-Year Charts are available and updated nightly on ChartScreen, plus there are two print volumes each containing 1,500 stocks. SRC’s core books are SRC Blue Book of 12-Year NYSE Charts, and its companion book the SRC Orange Book of 12-Year NASDAQ Charts. In addition, SRC publishes 12-Year print and online charts covering indices, sectors and industries, as well as ADR’s ETF’s and REIT’s.
Sector, Industry & Company Charts
The first place to start when reviewing the 12-Year are the sector and industry charts. These charts are key components to giving a solid view of which industries are performing best, because many believe that if you pick stocks from the right industries, you’ve won half the battle.
Another key component to stock selection is to understand the P/E ratio for each industry – not all industries have the same P/E ratio – hence companies in those industries may have higher or lower ratios depending on the type of business. Once you have a particular industry’s P/E ratio, then you can judge how a particular stock is performing compared to other stocks in that industry.
Chart Types: Growth, Cyclical, Recessive & Income
The importance of factors of both stock “selection” and “timing” in the development of a successful investment program is vividly portrayed in the sample 12-Year Charts which are presented on the following pages. Shown are a growth company, a cyclical situation, a recessive stock and an income producing stock.
Each chart dramatically pictures the pattern of the stock market’s fluctuations throughout the advance and decline phases of the stock market cycles of the past 12-Years. In this moving panorama, the individual stocks are often cast in distinct roles with widely varying “personalities” which statistical tabulations fail to dramatize.
Here is the picture of a successful company. It shows steadily rising earnings which have been reflected in higher stock market prices and a greater market evaluation of earnings. It also shows that the performance has consistently been better than the market generally. Along with rising profits, dividends have been increased almost annually. On the other hand, the record is not a straight upward line, for even the most outstanding companies are subject to some extent to the business cycles and market fluctuations.
This chart portrays the record of typical stock, demonstrating the wide fluctuations which characteristically occur in prices, earnings and dividends. This is the type of company which benefits greatly from the upside of an economic boom and suffers on the down slope. The chart also shows the tendency of these stocks to exaggerate the swings of the general market. In reflection of the risks involved in such issues, the price/earnings ratio is usually lower than the market average. With this record of wide price movement, cyclical stocks make good trading vehicles but obviously timing is of the utmost importance.
This chart portrays the record of a stock with a declining pattern. It is not a straight line, but one interrupted by successive rallies under favorable market conditions. But the trend is persistently down, possibly reflecting a declining industry, weak management, obsolete products, loss of competitive position – all resulting in lower earnings and dividends. This type of company “with few friends” is often sought out by bargain hunters who see in it a possible turn-around situation.
Of much less interest from a capital gains viewpoint than growth, are companies who are classified in “income” category. Relative to market, such stocks often have a less than attractive record. But they are not to be discarded since they do have appeal for the investor mainly seeking a good yield and the likelihood of gradual dividend boosts, along with some moderate appreciation. They are generally less vulnerable to cyclical changes than other groups, though they may be importantly affected by money rate fluctuations.
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