SIFTING STOCK INFORMATION

Stock tables are a smart place to start if you're researching investments. But there is a lot of other information available that you can use to evaluate stocks and the companies that issue them.

WHAT THE NUMBERS TELL

The following figures are good indicators of the shape a company is in—and whether its stock is likely to be a good investment. They are reported regularly in the financial press, at financial websites and online brokerages, and are also available directly from brokers.

DARTBOARD ANALYSIS
concludes that you make out just as well if you throw darts at the stock pages and buy what you hit. For several years The Wall Street Journal has carried a regular column in which professional managers' stock picks are pitted against choices reporters make with darts. So far, the professionals are ahead, but sometimes the random darts come close to evening the score.

The book value is the difference between the company's assets and liabilities. A small or low book value from too much debt, for example, means that the company's profits will be limited even if it does lots of business. Sometimes a low book value means that assets are underestimated, and experts consider these companies good investments.
The earnings per share are calculated by dividing the number of shares into the profit. If earnings increase each year, the company is growing.
The return on equity is a percentage figured by dividing a company's earnings per share by its book value.
The payout ratio is the percentage of net earnings a company uses to pay its dividend. The normal range is 25% and 50% of its net earnings. A higher ratio means the company is struggling to meet its obligations.

WHAT THE COMPANY TELLS

Companies are required by law to keep shareholders up to date on how the business is doing.

The most complete information the company provides is included in its annual report. You also get quarterly reports, with concise summaries of the company's current performance.

An annual report summarizes the company's operations for the past year. Often quite elaborately designed and illustrated, it usually begins with a letter from the company's chairman touching on the year's highlights and offering some broad predictions for the coming one.

A typical annual report includes:

USING THE INFORMATION
Different investment professionals analyze stock in different ways.

Those who do fundamental analysis study a company's financial condition, management, and competitive position in the industry, or sector. They may also look at the economy at large, such as unemployment and interest rates.

Those who do technical analysis chart the statistics of past market performance to identify price trends and cyclical movements of particular stocks, industries or the market as a whole.

A section outlining the company's philosophy of doing business.
Detailed reports on each segment of its operations. This information can reveal weaknesses in the management structure or the products or services the company offers.
Financial information, including the profit-and-loss statement for the year, and the balance sheet, showing the company's assets and liabilities at the end of the year compared to previous years. Footnotes attached to the financial summaries can sometimes reveal problems such as lawsuits against the company or proposed government regulations that might influence profitability.
An auditor's letter reassuring shareholders that the company's financial statements are in order.

Annual reports, along with other details about the company, are usually available from brokers, directly from companies, or over the Internet at corporate websites.

ONLINE RESEARCH

All the information you need to choose stocks is available on the Internet — much of it for free.

Thousands of corporate and financial websites, newsletters, FAQs and online forums provide comprehensive market information, from background reports on virtually every publicly traded stock to economic analyses and vital market statistics. Many online financial publishers will even send you a newsletter tailored to your exact specifications and interests, whether you want information on certain companies, particular market indices, or late-breaking news on the stocks in your portfolio.

One of the most reliable resources available for investors is the SEC's website (www.sec.gov). SEC filings for every publicly-traded company are available from its EDGAR database (Electronic Data Gathering, Analysis, and Retrieval System).

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Wachovia Securities is the trade name under which Wachovia Corporation provides brokerage services through two registered broker/dealers, which are non-bank affiliates of Wachovia Corporation: Wachovia Securities, LLC, member NYSE/SIPC; and Wachovia Securities Financial Network, LLC, member NASD/SIPC.

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