Though i might revive this thread after 7 years... Surely someone here is using this software? Any comments?
I am using Lincoln Indicators Stock Doctor. I started subscribing in November 2010. I'm new to stock investing so I can't really give a perspective on how well it has served me yet. I was googling one day looking for "fundamental analysis" and came across something by Alan Hull and he mentioned Stock Doctor in on his website and that is how I found it.
It has to be appreciated for what it is. It is not a buy/sell recommendation service. It applies a mainly statistical analytical process to company financial data to rate a company's health (strong, satisfactory, early warning, marginal, distressed). It then also identifies "star stocks" that meet certain criteria, ROA, EPSG, and so on and which are deemed (constantly healthy). For those companies that are "star stocks" Lincoln analysts provide an ongoing valuation and in-depth analysis with is reviewed in a timely manner in response to announcements and developments.
The software provides detailed financial info on all ASX stocks including broker consensus forecasts. This data comes from Reuters Thompson and Morningstar I believe. It has a decent charting tool and the ability to create detailed and complex filters for both technical analysis of share price and fundamental analysis of company finances. The most simple filter to run is an "undervalued star stock" filter. This will produce a report of those star stocks that are trading at a discount to the Lincoln valuation. I then run this list through a technical filter which applies the Alan Hull ActVest system which in a nutshell gives me financially healthy stocks potentially trading at a discount to true value that are in a sustained share price up-trend.
While "market sentiment" is listed as one of the Lincoln nine rules of investing, Stock Doctor doesn't provide any analysis if timing. It will identify stocks trading below Lincoln valuation and below broker consensus valuation. It does provide very functional charting application and technical filters to help you decide on buy/sell timing but provides no system for deciding. Buy and sell timing is up to you and Lincoln make no suggestions. It is not an advisory nor a financial planning service.
One criticism you will hear of Stock Doctor is that it doesn't alert you early enough to emerging opportunities. For example, MCE, a stellar performer and a company with solid fundamentals and great prospects only became a Star Stock this reporting season. By definition, it could not have been a star stock prior to this because one of the star stock criteria is EPS growth over 8% for at least 18 months, and MCE only listed mid 2010. So, by definition, stocks are not going to be identified as star stocks until they have been emergent and growing strongly over the medium term. So, for the conservative active investor, stock doctor identifies those companies with the strongest fundamentals (lowest risk of suffering financial hardship in a downturn, going broke) that are achieving solid sustained growth.
Another criticism of Stock Doctor that users have been providing feedback on in their investor network has been the churn rate of Star stocks in and out. Especially this reporting season. Some stocks have come in too late in their growth cycle and their subsequent performance disappoints. One bad reporting season and a star stock is out.
There has also been a lot of discussion recently on the investor network about the number of mining and mining related stocks have come in as star stocks this reporting season. Just some examples are OZL, MGX and FMG. This raises all sorts of questions that investors should already be addressing in their investment strategy anyway; where in the price cycle is iron ore, copper, etc; what are their long term outlooks; volatility of prices and profits and share price risk.
I would imagine that most conservative active investors such as myself hold a certain proportion of stocks that are not currently stock doctor stocks but are blue-chips, a certain proportion of stock doctor stocks (low fundamental risk high growth stocks) and a possibly certain proportion of more speculative plays.
In any case, even if you ignore the Lincoln "star stock" methodology, Stock Doctor excels as a information source for fundamental and technical analysis of ASX listed stocks. it provides detailed financial information for companies beyond what you can get for free on the web. Things such as PEG (PE to Earnings Growth ratio), ex dividend dates, links to all company ASX announcements. Furthermore, all the data is available to run through the filters.
Another part of the service is access to the Lincoln analysts. As a subscriber you can telephone and talk directly with the relevant analyst for a company or sector. I've telephoned and spoken with the analysts several times and this has been invaluable in making decisions. Lincoln constantly publish analysis for subscribers on their investor network too. This includes a daily stock market chat with subscribers, weekly stock market reviews, general economic commentary. From time to time analysts will also publish commentary on non-star stocks which they identify as potential out-performers. In the recent past these have included Legend and Silver Chef.
In terms of customer support Lincoln are very responsive. They hold regular coaching seminars including webinars. Their technical support is very responsive and their analysts are always available on the other end of the phone to subscribers.
My objectives in subscribing to stock doctor can be summed up as:
- Fundamental analysis of the financial health a company and the intrinsic value of its shares.
- Identify companies with solid growth/outperform potential both within and importantly outside of the S&P 200.
- Outperform alternative investment options without taking on excessive risk.
I'll come back in a year's time and update my findings on how Stock Doctor has actually my stock investments perform.