Six Hidden Investment Research Tools on Validea You Can Use For Free

Six Hidden Investment Research Tools on Validea You Can Use For Free

By Justin Carbonneau (@jjcarbonneau) —

This Friday I will be hosting a free investing webinar at 12:30 EST walking investors through the investment research tools we’ve created at Validea. In preparation for that webinar, I got to thinking about some of the second-level tools on Validea that are mostly free and could be helpful to you in your investing process.

In this post I’ll highlight these tools and provide examples of how these free resources can be utilized. I’ve included links to the video demos as well.

Stock Factor Report – View Factor Report

Our Stock Factor Report (under Research in top navigation) provides a quick snapshot of how a stock ranks using popular investment factors (i.e. size, value, quality, momentum and low volatility) and sub-factors. When investors enter a ticker, they are presented with an overall factor score (0-100, with 100% being the best), and below that are the factors and the input sub-factors. The factor report provides a quick and easy visual that tells you how attractive (or unattractive) a stock is through the lens of these popular factors. For example, a stock that scores 98% on the Value factor is cheaper than all but 2% of stocks using a composite of the sub-factors (P/E, P/B, P/S, P/CF, EV/EBITDA and Shareholder Yield) that compromise the Value factor rank.

You may not use the factor report in isolation, but this tool can help validate a stock idea or give you enough reason to pause to look into something further if a red flag jumps out at you.

At the bottom of the page, you will also see a table that shows comparable stocks that score closest to the company you are looking at based on their factor profiles. This is a nice idea generation add-on for those investors looking for new stock ideas. Watch our Factor Report demo.

ETF Factor Report – View ETF Factor Report

The ETF Factor is similar to the Stock Factor report only it applies the factors to the underlying holdings in U.S. traded equity ETFs in an effort to show you the factor and sub factor exposures at the ETF level. For instance, if you’re looking at a ETF that is supposed to be high on quality stocks but it ranks in the middle of the road based on the quality factors we look at, this may prompt you to dive in a little deeper or reconsider the position.

Under the Research dropdown in the top navigation, investors can type in an ETF ticker and at the very top of the page we display unique data points relating to ETFs – active share, fee for active share, # of holdings, implied liquidity / AUM capacity and levels of concentration. As you scroll down, you will see the factor scores, which allow you to get a sense of how the holdings stack up through these popular investment factors.

On this page we also display an ETF’s top over and underweights in terms of Sectors and Industries vs. the S&P 500, and below those graphics we show the ETFs that have factor exposures most closely correlated to the ETF you are analyzing as another way to generate new investment ideas. Watch the ETF Factor report demo.

Market Valuation Tool – View Market Valuation

Anyone who has read our blog posts probably has seen snapshots from our Market Valuation tool (under Research in top navigation). The Market Valuation tool allows you to see the valuation of the median stock in our investment universe through multiple valuation measures (TTM P/E, Current P/E, P/S, P/B, P/CF, CAPE Ratio) on a historical basis. You can also compare segments of the market based on size (large, medium, small) and based on style (value and growth). We often say valuation can’t be used as a timing tool but you can use the Market Valuation tool to identify areas that are relative cheap (or expensive) and then dig into those parts of the market using the other tools and resources on Validea. For instance, as of this writing value stocks, especially small cap value stocks and non-U.S. value stocks, look very inexpensive relative to U.S. growth (particularly mega cap growth stocks) – the Market Valuation tool can help uncover areas of the market that that appear attractive based on relative and absolute valuation measures. Watch the Market Valuation report demo.

Predefined Stock & ETF Screens – View Screens

One of the little hidden gems on Validea is a wide array of predefined stock and ETF screens, which you can find at the bottom of every page. If you scroll down to the bottom of each page, all the way down to the footer of the site, you will see two lists (POPULAR STOCK SCREENS & POPULAR ETF SCREENS) that are pre-populated screens identifying the top scoring stocks or ETFs using our guru models, factor scores or other fundamental methods. Whether you are looking for the top small cap value stocks, stocks that pass the Peter Lynch GARP style of investing, the Dividend Aristocrats listing, ETFs with the top multi-factor scores or some other methods, our pre-defined screens offer a great place to start your search.

We present the top ten names each day for free on these pages so there is plenty of value even if you aren’t a paying subscriber. If you click on the ticker on these pages, you will be linked over to the Factor Report and if you click on the name you will be brought to our Guru Analysis summary page, which provides scores and summaries on the stock’s fundamental attractiveness through the lens of the guru models (i.e. Buffett, Lynch & Graham) we run at Validea.

Strategy/ETF Matching Tool – View Matching Tool

Imagine you are a huge fan or Warren Buffett’s style of investing. Or maybe the Peter Lynch growth-at-a-reasonable price method really resonates with you, or maybe you are a deep value investor and want to find an ETF that buys dirt cheap stocks like Ben Graham would in today’s market. You can use our Strategy/ETF matching tool to source ETF ideas that most closely match the factor profiles of each of our quantitative guru models. To identify the matching ETFs, we take the current 50 highest scoring stocks using each strategy and match their factor profiles with our database of US equity ETFs using over 20 individual value, growth, momentum, quality and low volatility metrics.

Portfolio Correlation Tool – View Correlation Tool

Our portfolio correlation tool allows an investor to see how correlated our guru model portfolios are to each other. This can be useful for those implementing one or many of our portfolios to see how different strategies correlate with each other over time. Combining uncorrelated models together can help offset periods when one model may be struggling since the other has the potential to be performing well during that period.

These are just a few of the less travelled parts of the Validea web site that are mostly free to use and that you may find interesting and helpful as you look to analyze stocks and ETFs with discipline or source new investment ideas.

Feel free to join us on Friday’s (1/14/2022) webinar – Find Your Edge In Today’s Market With Validea’s Investing Tools – where I will walk through some of these tools and the other resources on Validea.

Justin J. Carbonneau is VP at Validea & Partner at Validea Capital Management.
Social | Podcast | Interviews | Articles
about Justin all in one place