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Online Investing Hacks by Bonnie Biafore

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Hack #23. Obtain Averages for an Industry and the Competition

Some web sites place industry average values next to a company’s financial measures for convenient comparison; you can obtain averages for a company’s direct competitors with carefully configured stock screen results.

Each industry has its peculiarities: utility companies have learned to operate under debt loads that would crush companies in other industries; grocery stores can thrive with profit margins that leave no room for error; software companies enjoy high profit margins that other companies envy and that all software companies must attain to stay in the game. To understand whether a company is performing well or is down with the dogs, you must compare its financial measures with those of the overall industry to which it belongs. And, because most industries include companies of different sizes or subspecialties, it’s a good idea to compare a company to its direct competitors. In most cases, a quick online comparison is enough. However, if you want to download values for more thorough investigation, you can play games with stock screening tools to produce downloadable spreadsheets and calculate averages for the competition yourself.

If you want to compare industry and sector averages to the values produced by a company, Reuters Investor (http://investor.reuters.com) makes it easy. To access a stock page, type a ticker symbol in the Symbol box and click Go. On the stock page, click Ratios in the navigation bar. By ...

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