FIN 466: Investment and Security Analysis

SIC and NAICS codes can be useful tools when doing research on an industry or looking into a company's competitors.They are American standard codes and they essentially classify the industry areas in which companies operate.

NAICS Example:

44 - Retail

448 - Clothing and Clothing Accessories Stores

4481 - Clothing Stores

448140 - Family Clothing Stores

Web Resources

Library Databases

These resources provide profiles, reports and statistics on private and public companies. Use these to research a company's finances, executives, business strategy and placement within a market.

Library Databases

Web Resources

Library Databases

Monitor the industry

• monitor current industry developments

• identify industry trends

• analyze the competition

• locate statistical data and industry forecasts

• examine the political, legal, technological and environmental issues that affect industry operations

Library Databases

Industry News

Automotive

Airlines / Aviation

Aerospace / Defense

Banking and Financial Services

Biotechnology

Entertainment

Food / Beverage

Gambling / Casino

Healthcare

Mobile Communication

Oil / Energy

Real Estate

Industries are dependent on the economy at large. Governments collect a wealth of business and financial information at the national, international, and individual level. Many are available at the summary and micro-level segments. Of particular interest may be national census, banking, business, and consumer income and expenditure data collections.

Web Resources

Financial ratios are often used to compare a company against an industry average or other companies in order to benchmark or measure a company's performance. Industry ratios are often useful when creating the financial components of a business plan and starting a new company. When using these resources make sure you are comparing similar sized companies. Each resource will give different figures for each industry based upon the average asset size of the companies in the industry.

Library Databases

Web Resources

Strength, Weaknesses, Opportunities, and Threats (SWOT) analysis.

If there isn't a SWOT analysis, you can do your own SWOT analysis by collecting information from multiple sources, such as company profiles, industry & market information, journal articles and news. If you are researching a public company, take a look at its Annual Reports, especially the section "Risk Factors." 

Here are some other tips on doing your own SWOT analysis:

Explore the company website and consider the following:

• What kind of service/product do they provide?
• What kind of customer needs are they meeting? Are they meeting these needs better than their competitors, at a better price?
• What's their customer value proposition?

Interview the company, if possible. State that you are a student researching on the company for academic work, and that you will agree to sign any non-disclosure agreement. Call and ask them nicely. You might be surprised! * Most of the "internal information" (e.g., HR practices) of small private firms is highly unlikely to be available in secondary sources; in this case, talking with the company is the only way.

Read reviews, if available. Although customer reviews can be biased and unreliable, consistently positive or negative reviews should be taken into account. Consumers often find weaknesses that the company may not be aware of. However, be realistic -- you can't be all things to all people. Always keep your target market in mind.

Take a look at the competitors and consider

• What kind of service/product do the competitors provide?
• What are your company's competitive advantages (e.g., unique product/service, location, size, customer service, price, etc..)? How does your company differentiate itself from others (i.e., what's its niche)?

Library Databases