Value Investor Tool – Tutorial

This form is shown automatically when you first open the Value Investor Tool (VIT). It has general copy write information & your current version of the VIT. Most importantly though is the link to the tutorial page on the internet. It is highly recommended that you read through the documentation so that you have an understanding of the features that VIT has to offer.

Dynamic Help

VIT uses a unique help system. You activate a help form by pressing a help button and the help content for the topic will be shown.

*Tip - All help topics start off with default content; this includes any new projects you create.

VIT allows the user to edit the help content, in a project, so that they can enter their own notes or change the default content to information that they deem more appropriate to the issue.

To change the help content simply edit it in the help form and then click the “Save and Close” button.

Note*: Help content is only changed for the project you are currently working in.

Note*: If you wish to reset the help content for a project back to the default follow the instructions in Project Preferences.

Future Value Calculator

The future value calculator (FVC) is a convenience tool that can be used at any time to calculate the Future, Present, Rate or Time for an investment.

To use it simply reset the form, with the “Reset” button. Enter the information into three of the fields and select the “Calculate” button. The empty field will be calculated and filled in.

Note: The “Keep calculator on top of other forms” check box will attempt to always have the calculator shown. This way you can view information on other forms and having the calculator available for data entry.

Tutorial Project

The tutorial project is used as an example for all of this documentation. It has a fictional company populated with financial information. This company does use a real company’s symbol to demonstrate the VIT updating features.

If the tutorial project doesn’t open automatically when you start the tutorial you can open it through the main forms menu File -> Open and browse to your install directory (default C:\Program Files\Access Business Solutions\Value Investor Tool\Tutorial.VITProject).

Updating Versions

The VIT has an automatic updating detection system. This allows the VIT to alert you if there is a newer version available for download. It performs this check automatically every time you run the application.

You can also run the update check manually by selecting Help -> Check for updates, on the main summary form.

2. Main Summary

Main Summary Form

Figure 1 – Main summary form

The main summary form gives you a summary of all of the companies in the current project. Each company has the following information displayed:

· Company Name

o *Tip – Enter important notes that you want to see in the company’s name field and they will be shown in this column. E.g. “Own 250 units”.

· Symbol

o The company’s symbol.

· My Buy Price ($)

o The price you have set to review this company for purchase.

· Price ($)

o The last known price for a share in the company.

· Change ($)

o The last known change in price for a share in the company.

· My Buy P/E

o The P/E you have set to review this company for purchase.

· P/E (ttm)

o The P/E for the company (Uses the latest known price and the E.P.S. estimate for the trailing twelve months)

· Alerts

o Any alerts that have been triggered for the company

§ Buy price in range

§ Buy P/E in range

§ Sell price in range

§ Sell P/E in range

§ Financial report(s) due out

Creating new projects

To create a new project, select “New->Project” on the main summary form.

The new project will be blank and you will need to create or import new companies.

Creating new companies

To create a new company, select “New->Company” on the main summary form.

You will then be prompted to enter the company name, symbol and what exchange it is traded on. Then click “Create”. The new company is created and added to the main summary and the company form is opened automatically.

See Company View for information about the Company View form.

Note*: Two companies, in a project, can not have the same symbol and exchange.

Updating Stock information

The financial market data, including quotes, charts, news and research (collectively "Information") are provided by various information suppliers ("Information Providers") that are independent of The Value Investor Tool.

The Information may include the views, opinions, and recommendations of individuals or organizations that may be of interest to investors generally, but The Value Investor Tool and its Information Providers do not endorse such views or opinions. The Information is not intended to provide investment, tax, accounting or legal advice nor does it constitute a solicitation of any offer to buy or sell any securities.

Any copying, re-publication or re-distribution of The Value Investor Tool’s Content, including by caching, framing or similar means, is expressly prohibited without the prior written consent. The Value Investor Tool shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon.

Disclaimer

Though the Information is believed to be reliable, neither The Value Investor Tool nor its third party data providers warrant or guarantee the timeliness, sequence, accuracy or completeness of this Information. IN NO EVENT WILL THE VALUE INVESTOR TOOL OR ITS THIRD PARTY DATA PROVIDERS BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, (INCLUDING, WITHOUT LIMITATION, LOST REVENUES, LOST PROFITS OR LOSS OF PROSPECTIVE ECONOMIC ADVANTAGE RESULTING FROM THE USE OF THE INFORMATION OR FOR OMISSIONS OR INACCURACIES IN THE INFORMATION) EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR FOR ANY CLAIM BY ANOTHER PARTY.

VIT allows you to automatically update the last known price, last change in price, E.P.S. (ttm), E.P.S. current year & E.P.S. next year data through the Value Investor Tools web services. You can do update two different ways:

1. All companies

In the main form select “Tools->Update all companies info from the Internet”. This will bring up a progress form to show you what company is being updated, how many are left & any warnings that have occurred.

Tip* - You can cancel the updating process by selecting Cancel Updates. The form will then stop after the current company has finished updating.

Note*: Sometimes E.P.S. information is not available for specific stocks. It is then up to the user to manually enter this data in the company view form to keep the formulas up to date.

2. Single company

You can update a single company by opening its view (See Company View) you can then select the “Update From Internet” button or in the menu “Tools->Get Info. from Internet”.

Note*: Warning will be shown in a dialog otherwise the information will be updated in the text boxes.

Import/Export Companies

The VIT tool promotes the responsible sharing of information between investors. To facilitate this you can export & import company information. So that it can be shared with other VIT users, friends, family and colleges. Exported companies are saved in files with the “.VITCompany” extension.

Importing Companies

To import a company you select “Tools->Import/Export->Import Companies…” from the main summary menu. Browse to you .VITCompany file and select it.

Note*: Any companies that match existing companies in your project will not be imported. You must delete the existing companies and then import them again.

Tip*: You can have two VITs open at once and import the companies into a blank project for manual comparison. Merging of company data is scheduled for future versions of the VIT.

Exporting Companies

Single:

1. Open the Company View and select “Tools->Export this company”.

2. Name the file, if desired, and select where to save it.

Multiple:

1. Select “Tools->Import/Export->Export Companies”, from the main summary form menu.

2. Select the companies that you want to export from the list. Click “Export”.

3. Name the file and select where to save it.

3. Preferences

Preferences can be changed using the preferences form. To open the form select “Tools->Preferences…” from the main summary form menu. Cancel will cause any changes **Except for Default Help Reset to be reverted.

Project Preferences

Project preferences are specific to the open project. They are as follows:

· Return on Gov. Bonds This is used to determine the intrinsic value of a company relative to government bonds. This number should be a rate of return that you know you can get if you put your money into government bonds (the most secure investment you can make).

Note*: it is entered as a decimal E.g. 6% = 0.06

· Desired rate of return on investments. This is the rate of return you want when you invest in a company. It is used in the buy & sell estimate calculations. Some great investors believe that a rate of less than 15% is not worth the investment due to loss in value from taxes, inflation and commissions.

Note*: it is entered as a decimal E.g. 15% = 0.15.

Tip*- At 15% your investments should double every five years.

· Margin of Safety (MofS) – Is the percentage range that you want financial alerts to be set off at. E.g. if MofS is 0.1 and the buy alert is 10.00 then when, you update the company prices and, the price is 11.00 or lower the alert will go off.

· Internet Preferences – If this is checked then when ever you open this project it will automatically try to connect to the update service and update all of your companies price and E.P.S. estimates.

· Dynamic Help System – Use “Reset To Default Help” button if you wish to return the help systems content to the install default version.

Application Preferences

Application Preferences are preferences that apply to all projects on the machine.

1. When I open a project file I want a back up copy created… - When this is checked then project files are backed up with the following format “<Projectfilename>.VITProject backed up on YYYY_MM_DDTHH_MM_SS<AM|PM>”. The files are backed up in the same directory as the file being opened. This way you can “revert” back to a stable version if you make any big mistakes or errors that are irreversible.

4. Company View

To open a company view you select it on the main summary form and then perform one of the following:

· Press Ctrl + O

· Right click menu -> view

· Or double click the row.

File Menu

· Company

o Save Changes – Save any changes that you made.

o Detailed Report – Displays a report detailing the company’s financial figures and charting it yearly data.

· Tools

o Redo Calculations – Select this after making any major changes to the company’s data (or close the form and reopen it). This recalculates all estimates, returns and ratios using the latest information entered in the financial data.

o Get Info Form Internet. – Update stock price and Estimated E.P.S. information from the internet.

o Export this company – export this single company so you can share it with a friend.

Business Perspective

These are questions used by many value investors to ensure that the company meets the standards for a “Value Investment”. If the answer to most of these questions are positive then you could have a winner then all you have to do is wait for the right price.

Tip*: Each help button will give you a idea of how to best answer the specific question and what you should look out for.

Per share Growth

This screen calculates the Long-Term and Short-Term growth rates for E.P.S. It is only as good as the information you provide in the data grid. It gives you an idea of how well the company has done historically on a long and short term basis.

It also uses the estimated current and next years E.P.S. to give you a estimated growth rate for the company’s E.P.S. over the two coming years.

Intrinsic Value & Initial Return

Value relative to government bonds (Intrinsic Value) – This calculates the amount of government bonds (I.e. Safe investment dollars) that you need to make the same “return” as this company gets from it’s earnings. Remember that government bonds will give you a safe and steady return but a good company’s returns will continue to grow year over year.

Initial Rate of Return (W. Buffets) - This is the initial rate of return that you will “conceivably” receive if you bought the stock at the current price. This uses the theory that once you own a company its earnings are your earnings and are added to the value of you share thus adding to the value of your investment. This theory can only be used for companies that have “passed” the business perspective portion of this form.

Returns & Ratios

This gives you the different returns and ratios for the company. It uses the information in the data grid so if you have not entered valid data then these should not be used to evaluate this company.

Buy & Sell Estimates

All values in this page can be changed manually so you can adjust your rates and growth figures to more conservative or more enthusiastic numbers as you see fit.

This page uses the information entered in the yearly data to determine historical growth rates & Low P/Es. It then uses this information to “estimate” what you would be able to sell a share for in 5 and 10 years.

Then using the rate of return you desire it calculates what price and P/E you would have to buy a stock for in order to make your rate of return. This is assuming that the company performs at the estimated rate.

Parameters – You can save your personal parameters on this page by sampling selecting a parameter title, or entering a new name, and then selecting save.

To load old parameters select them from the drop down list and click load.

Note*: if you select the check box “use current E.P.S” then your old values will not replace the current numbers.

To delete a set of parameters select them in the drop down and click delete.

5 yr tab – This tab estimates for a 5 year investment period.

10 yr tab – This tab estimates for a 10 year investment period.

You can conveniently set the prices and P/Es for your alerts with the corresponding “Make my buy price”/”Make my sell P/E” buttons.

Note*: You still have to turn your alerts on in the Company Info section for the company before they will activate.