Today we are going to take a look at the Simply Investing Report. We will see what is it, how much it costs, is it worth it, who is it for and more. Let’s start by giving you a little explanation on what is it.
Before we start you can take a look at the metrics section in case there is anything you don’t understand.
What is the Simply Investing Report?
Basically this is a monthly report with structured statistics on the most undervalued and overvalued stocks currently at the stock market. It gives you different lists, charts and spreadsheets. It is targeted at high-quality dividend growth companies. The selection happens based on 9 quantitive points.
Some Background
This report is created by Kanwal Sarai, an investor with over 30 years of experience. His portfolio has returned over 400% since 1999 against 224% for the S&P500. He uses detailed screening procedures to analyse stocks.
This report simply shares his screening strategy, so you can use it to your advantage.
Selection Process
Every company goes through an extensive screening method. After that the companies get a point for every criteria they pass during the screening process. The screening points look like this :
1. Do you understand the product or service offered by the company?
2. Will people still be using this product or service in 20 years?
3. Does the company have a low-cost durable (lasting) competitive advantage?
4. Is the company recession proof?
5. Has the company had consistent earnings growth? Generally, the EPS growth must be at least 8%
6. Has the company had consistent dividend growth? Generally, the dividend growth must be at least 8%
7. Does the company have a low payout ratio? Payout ratio must be 75% or less.
8. Does the company have low debt? Debt must be 70% or less.
9. Does the company have a good credit rating? Company must have a minimum S&P Credit Rating of “BBB+”.
10. Does the company actively buy back its shares?
11. Is the stock undervalued?
a. The P/E Ratio must be 25 or less.
b. The current dividend yield must be higher than the avg dividend yield. c. The P/B Ratio should be 3 or less.
12. Keep your emotions out of investing.
A reminder to keep your emotions out of the selection process. Discipline and patience are the keys to successful investing.
Out of those 12 rules, 9 are quantitive. The companies there get valued based on those 9 quantitive criteria. Then they get arranged in the monthly report based on the score of the screening for each company.
A Look at the Report
The first one is for the stocks that pass all of the above. In other words those are the companies that score 9/9 for the month . They need to have good credit rating, they need to offer dividend safety, they need to have good balance sheets and more.
So you don’t get some random companies just based on P/E. You get high-quality stocks, who are trading below their historic value. Then they all get a grade depending on their overall quality and their current value. Let’s see an example of this April’s list.
As you can see this month you have companies such as Home Depot, Mcdonald’s and Disney. You see their dividend yield, dividend growth and other metrics at the time of the report.
I made a little check and most of those companies are already up from the time of the report in the beginning of the month. Which brings me to another point- please don’t count on this list to buy stocks for April.
The price of the stocks are now different and most of these companies are no longer undervalued. Yes, they are still high quality companies, but their valuation will be a bit different.
This report works when you have the exact prices of the stocks when it comes in the beginning of each month. Past reports don’t work simply because prices change, circumstances change. Stocks that are undervalued this month might not be undervalued next.
That being said let’s carry on. So first you get the top 10 stocks for the month. Then you get a couple more lists. One is for 5 US and Canadian stocks. Then you get 2 lists- one for US and one for Canadian stocks. They are arranged by different metrics and overall score. You also get a spreadsheet, so you can arrange them to your likings. It looks like this:
It includes a lot of companies with a lot of metrics. Then you have a little grade in the middle with 1-9. This shows you how well the company has scored during the screening process. The higher the grade the better.
You have the same list for overvalued companies in both Canada and the US.
Then you have a little newsletter from the founder of the report. It includes an overview of the markets, tips on how to invest, instructions on how to use the report properly and other stuff.
How Much it Costs
You have 2 options- $19.99 per month or $199 annually. You can cancel at any time.
But for all my readers you have a special discout. Enter the code FREEDOM15 and you will get a 15% discount on the investing report. You can sign up from here.
What I Like About the Report
I like that it is very much structured around stats and data. There is no subjectivity in the report, just numbers. And we know that in investing you need to keep your emotions out of the way. Here you have no emotions- just straight up information, which is a big plus in my eyes.
Also you are the one that makes the decisions in the end of the day. You have a big list of companies ordered by value and you get to choose which one to pick. So basically you have a lot of the research cut out for you. It is also focused on a very high-quality companies, which gives you a good chance to get a hand on the market.
What I Don’t Like About the Report
There is not much coverage on UK stocks. There are a lot of big UK companies traded on the NYSE of course, so you do get a decent amount of UK stocks on this report. But still it would be nice to have some more FTSE 250 companies in there.
Is it Worth it
A lot of you know that I am very hesitant to all kinds of investing services that are out there. But this might be one of the very few that I would actually sign-up for. Why? Because you get the data that you need every month, but also you get to decide which would be the best pick for your portfolio.
Here you just get data in the forms of spreadsheets and you choose which stock would you want to buy or not buy.
The way I see it is as automating all the time-consuming screenings you need to do every month. Because I can tell you that- there is a lot of work that is going into creating such a spreadsheet with all of those stocks and organising them based on historical values.
So overall- if you want to spend your time off to manually screen every company in the US and Canada then this will not be worth it for you.
But if you want to have some extra free time every month, then this product is totally worth it.
Who is it For
Well, first and foremost this service is for long-term dividend investors. All of the companies from the list are dividend payers with years of history of paying growing dividends.
Second this service is for people who don’t want to spend hours every weekend screening stocks, but still want to pick their own companies. This list just cuts out the most tedious part of it all.
As some of you know screening companies is like passing them from a sieve. First you check for debt levels, then you check for dividend safety, then you check for growth and so on. And in the end you have a list of 10-20 companies that you decide are the best in the current time.
Well, this report saves you the time from all that screening and you are left with the top 10-20 stocks.
So overall this is for any long-term investor that wants to save time on screening stocks every month. The report does that for you.
Who is it Not For
First, I would not recommend this report for total beginners. There are a lot more things you need to do before you start picking stocks. I advice you to first learn the very basics. Then to pick your own stock market strategy .Then how to research stocks, and how to build a portfolio. And after all that you can use this report to build your long-term portfolio.
I don’t advice on just blindly picking stocks from the report. Yes, most of the stocks are going to be really high-quality and very well researched. But you still need to know how to build a portfolio, you still need to understand how to control your emotions and how to avoid basic mistakes.
So if you are just starting out I advice you to first learn the basics and then you can start using this report.
As a chef I can give you an analogy. This report is like a good knife. If you know how to use it it will improve your overall results by a lot. But if you don’t the most you can do is cut your finger off.
That’s why my advice to all the beginners out there is to first learn how to use a knife. Then once ready you can proceed to buy a nice one.
Summary
Overall this is one of the very few investing products out there that is actually suited for proper long-term investors. It gives you all the information you need and you get to choose how you use it.
But please be advised- don’t get this report if you are just going to blindly pick stocks from there. The idea is to have the most undervalued stocks every month, so you can choose which one suits your personal portfolio the best.
Remember that everyone is different, have different amount of capital, different time horizon, different risk tolerance and so on. Overall it is a very good tool, but you need to know how to use it properly.
Also please remember that every investment carries risk. Share prices can go up, but also down. And in most cases this happens due to unforseen circumstances. Just because you have an extensive screening process doesn’t mean that every stock cannot go down. Please always keep that in mind.
Thank you all for reading, don’t forget to join the newsletter if you would like to receive a free ebook on how to build a monthly dividend portfolio.