Pay me money.
Well, I lost some money in the stock market after investing in Time Warner (TWX) after the release of the Ben Affleck flick, Argo. Once again I learned why staking your money for such a short period of time based on a small portion of the overall profit calculation for TWX is not a wise decision. But at least I’m learning, we are learning together. As we follow up on what we learned from this experiment it is crucial that we take into account our findings, so that we don’t lose money in the same fashion as we did previously.
Today we look at a few different sources as they announce their position on the TWX stock overall, we incorporate this information, if credible, into our own analysis to assess the probability of profitability, if any such exist. We may find that it may have not been a wise decision to invest in TWX for a month as I did previously. The Street and Market Watch list TWX as a buy option, whereas Zack’s analysis maintains a HOLD status. But who is Zacks and what is their supporting data leading to a HOLD status of TWX?
By simply scrolling to the bottom of Zacks.com I was able to locate the About Zacks link. The first thing my eyes were drawn to a was the following in bold, “Earnings estimate revisions are the most powerful force impacting stock prices” Len Zacks PhD form MIT, founder of Zacks research. Like every other investment research company they humbly brag about being a leading industry resource and then on the same page they give it to you straight, just as The Street does, “Zacks rank is completely mathematical. It’s cold. It’s objective. The Zacks Rank does not care what the hype on the street says.” Therefore if they take out the rumors and assimilate their equations with raw data to analyze prospective stocks by means of analytical analysis.
It appears that the stock market has been doing for years, what analytical social media data is currently mimicking. Analysis of purely analytical information is the market research for stocks as well as consumers engaging in social media. That was purely a tangent but relevant for another blog entry in the future.
The Street and Market Watch are confident on the success of the TWX stock due to recent success and upcoming proven profitable ventures. In a nutshell, as reported on The Street, TWX earnings growth has helped raise shares by 26.69% within the past year, it has improved it’s earnings per share by 10.3% in the most recent quarter, and the debt-to-equity ratio is somewhat low at 0.66. One last point The Street points out is “The firm exceeded the industry average cash flow growth rate of 6.52%” (TheStreet.com).Market Watch reports the upcoming money makers that TWX is about to release, “Time Warner is excited about its prospects in films, especially with the success of “The Dark Knight Rises” and the promise of a “Hobbit” franchise in the works.” To sum up, judging TWX’ performance in the most recent quarter, the low debt-to-equity ratio, and promise in upcoming projects, Time Warner investors may have something to look forward to for the upcoming 2013.
So who do we trust for our information? The Street claims to use cold, objective numbers just as Zacks claims, and yet the two have different outcomes for the status of the stock. It comes down to trust and track record of the research firm. All the numbers and data used between each firm is constant, their analytical calculations differ. The one thing the stock market isn’t…predictable. Therefore, I can run numbers on trends, past successes, and predict future trends, but never actually pinpoint the success of a stock. The only assurance I have are my knowledge of a stock, the market, and know my limitations. This may sound vague but it is a great stepping stone to getting your feet wet. Baby steps.
Contributing Sources:
Money Image: http://nyaltnews.com/wp-content/uploads/2012/08/6551534889_9c8ae52997.jpg
Billy Simpson 
