- Review of: Value Line Investment Survey
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Value Line is the granddaddy of stock investment research, with a history going back to 1931. Historically, it has performed and even beat the competition when it comes to risk-adjusted performance. However, in the last 75 years, better and more efficient research services have taken the spotlight.
I have personally used the Value Line Investment Survey for years. I started using their material when I was in my early twenties. Back in 1992 when the Web didn’t exist, I had to visit my local library to do stock research. They are the granddaddy of investment research companies, and they have been in existence since 1931. In comparison, they make Morningstar look like a startup company. Both individual and professional investors have used Value Line to quickly gather investment research.
The famed Warren Buffet calls Value Line, “An incredible value! I don’t know of another system that’s as good”. The former investment manager Peter Lynch has called Value Line “the next best thing to having your own private securities Analyst”.
As a value investor like me, it makes sense that I would like a newsletter from Value Line. Their research is based upon company fundamentals, not technical analysis. Their newsletter offers quite a bit of information for all levels of investment experience: from the novice to the expert.
Value Line’s Investment Tools
Value Line’s investment research is not only available via print material that’s mailed to you weekly, but it is also available on their website. Most people aren’t aware of this service. Each subscription provides three sections that are updated weekly and more frequently online. Value Line offers comprehensive research on over 1,700 stocks. The three main sections are:
- Ratings and Reports: Each week, a selection of full-page stock reports on approximately 130 stocks in specific sectors. The sectors are on a rotating basis so all of the stocks Value Line monitors are covered every 13 weeks. Each stock report covers current and historical financial data, detailed financial results, 3-5 year price and earning projections, charts, rankings, forward-looking, and objective analyst commentaries.
- Summary & Index: Similar to a wide-angle lens on a camera, this gives a high level view of the stock market with pre-set screens. If using their online service, you can create your own custom screens.
- Selection & Opinion: This section gives current economic, market stats, and forecasts.
The service can be purchased in print format or as an online subscription. Subscribers also have access to three model portfolios they may follow if they do not wish to construct their own portfolios.
What makes Value Line Investment Survey unique is their Timeliness® Ranking system. It measures the expected price performance of the stock in the next 6 – 12 months. This rating is on a 1 to 5 scale with 1 representing the highest score achievable. This ranking is relative within the 1,700 stocks they monitor. The distribution of those ratings is as follows:
- Top 100 Stocks
- Above Average (300 Stocks)
- Average (900 Stocks)
- Below Average (300 Stocks)
- Lowest Rated 100 Stocks
Investors are encouraged to purchase a portfolio of stocks across six or more industries with a ranking of 1 for Timeliness. Over time, investors are encouraged to monitor this rating, and when a stock falls to a 4 or 5 rating that stock then becomes a candidate for selling.
How Has Value Line Performed?
Mark Hurbert, a MarketWatch columnist who studies the performance of investment publications, has written for over a 20-year period, The Value Line Investment Survey “…is in first place for risk adjusted performance.” (See this article and this article for more details)
Value Line Report – Free Sample
To get an idea of what’s in their newsletter, I’ve included a sample of Value Line Ratings and Report from 2009.
How Useful Is Their Research?
Yes, it’s true you can find a lot of Value Line offers for free on sites like Yahoo Finance or Google Finance, but their insight and research details are second to none. It can be said their annual fee is somewhat expensive, but it could recoup that cost with just one investment when using Value Line.
Value Line’s Investment Survey has been a time saver for me. It’s helped me quickly narrow down my stock selections to a small subset for further research. The amount of information they give you on a weekly basis can be a little overwhelming. I don’t base my research solely on their recommendations. It does help me determine if I should investigate further or pass investing in a stock.
Unless you are into nostalgia services, I suggest looking other than Value Line. Though there are better online services like YCharts and Morningstar that offer as much, and in some cases more in-depth investment research online.