Sunday 18 February 2018

Strategy Report Feb 2018: Initiating Position in SSE


I have already taken a position in National Grid (NGG) and will also take a position in SSE  (previously known as Scottish and Southern Energy) . When I find a sector attractive due to its dividend yields, I prefer to diversify by buying more than 1 stock from that sector. 

To help me with my decision-making, I decided to subscribe to the purely quantitative Robo-Analyst Report Stockreports+ by ThomsonReuters. IBKR gave me a free trial and I liked the way it summarised useful quantitative information and also gave a peer comparison.  Also, Morningstar did not have a recent report of National Grid. As for Motley Fool, they love this share, just like they love almost any share with a high dividend yield. 

In the fundamentals section of the report, the Robo-Analyst Looks at:

  • Profitability:  Revenue Growth, Gross Margin, RoE, Net Margin
  • Debt: Current Ratio, Debt-to-Capital, Interest Funding, Interest Coverage
  • Earnings Quality: Operating Cash Yield, Accruals, Days Sales to Inv, Days Sales in Rec.
  • Dividend: Dividend Growth, Dividend Payout, Dividend Coverage, Current Div. Yield

Obviously, the importance (or relevance) of factors like Days Sales to Inv may vary across sectors, so you have to take that into account. 







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