This is the handout for the April 19, 2011 "Investment Club Operations" webinar conducted by Doug Gerlach and ICLUBcentral. For more information, visit http://www.iclub.com.
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Picking Stocks for Your Investment Club
1. Picking Stocks for Your Club Portfolio 4/19/2011
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by Doug Gerlach
President, ICLUBcentral Inc.
April 2011
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by Doug Gerlach, gerlach@iclub.com 1
2. Picking Stocks for Your Club Portfolio 4/19/2011
Download a handout of this presentation from http://www.slideshare.net/douggerlach/
1. Has company grown sales & EPS consistently?
2. Has company grown sales & EPS strongly
relative to its size?
◦ Small companies grow more quickly than large.
3. Are you confident that company can grow sales
& EPS at acceptable rate over next 5 years?
4. What are the primary drivers of growth
(headwinds)?
5. What are key obstacles to growth that should
be monitored (tailwinds)?
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3. Picking Stocks for Your Club Portfolio 4/19/2011
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6. Are pre-tax profit margins consistent or growing?
7. Are pre-tax profit margins above average compared
to industry & peers?
8. Are you confident company can maintain or expand
pre-tax profit margins over next 5 years?
9. What are primary drivers of margin expansion
(headwinds)?
10. What are problems that would cause margins to
contract (tailwinds)?
11. What competitors should be reviewed & monitored?
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4. Picking Stocks for Your Club Portfolio 4/19/2011
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12. Is company currently selling below or close
to Average P/E Ratio (Relative Value
<~100%)?
13. Is company currently selling below or close
to its Projected Average P/E Ratio?
14. At current price, can purchase support
potential 15% total return with >3 times
upside to downside?
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5. Picking Stocks for Your Club Portfolio 4/19/2011
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} You may often adjust future expected High
& Low P/E Ratios below historical levels.
} Proj Avg P/E = (Sel High P/E + Sel Low P/E)/2
} How does Current P/E compare?
◦ Should be close or lower.
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6. Picking Stocks for Your Club Portfolio 4/19/2011
Download a handout of this presentation from http://www.slideshare.net/douggerlach/
15. How does current & near-term economic
climate affect this company’s business?
◦ Is company cyclical or adversely affected by
economic slowdowns?
16. How stable & competent is company’s
board & management team?
◦ How long has key management been in place?
◦ Are insiders buying or selling?
◦ Is board diverse & independent?
17. What are tax implications of ?
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18. How does the size of this company fit with
other holdings?
◦ Do not overload on large company stocks.
19. How does industry group of company fit
with other holdings?
◦ Diversify by industry group.
20. Would buying this company improve the
overall quality & return of portfolio?
◦ Is there a weaker holding you can replace with
this stock?
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7. Picking Stocks for Your Club Portfolio 4/19/2011
Download a handout of this presentation from http://www.slideshare.net/douggerlach/
Large Small
(> $5B), (< $500M),
25%
25%
Mid-
sized,
50%
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Email me at
gerlach@iclub.com.
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