The following was originally published on the American Association of Individual Investors (AAII).
Finbox.io is an online stock research platform designed for individual investors and asset managers who care about understanding a stock’s fundamental value. The platform helps investors analyze their investments so they can better understand what they’re investing in and why, which can help reduce risk and increase returns.
Some popular features of the site, described in further detail below, include:
- Fair value estimates
- Pre-built valuation models
- Guided model builders
- Powerful stock screener
- Smart watchlist
Finbox.io currently offers two membership levels: Free and Pro. A Pro membership costs $39/month or $390/year. Pro members enjoy unlimited access to premium features like our fair value estimates, the stock screener, and downloads to Excel and Google Sheets.
A 14-day free trial of our Pro membership is automatically granted on signup, so users can try it before deciding if they’d like to upgrade. After the Pro Trial ends, the account automatically converts a free plan. With this, users can still view models and charts, manage a watchlist, and receive alerts.
Fair Value Estimates
Margin of safety measures the difference between a stock’s intrinsic value and its market price. Intrinsic value is the actual value or “true value” of an asset based on an individual’s underlying perception and expectations.
Market value is what an asset is selling for in the market, and unfortunately market value and intrinsic value are often not the same. The process of determining a margin of safety typically involves analyzing financials, building models, and finding similar companies — a process that can be difficult and time-consuming. Finbox.io’s fair value estimates give investors a head start by doing much of the heavy lifting so they can focus on understanding the business and its future prospects and the trade-off between value and cost.
Unlike research that’s released by large banks to serve client interests, finbox.io’s fair value estimates are unbiased. We use our technology to apply detailed valuation models to thousands of companies every day to calculate their fair value. An example for Apple Inc. (AAPL) is provided.
Pre-Built Valuation Models
Since transparency is one of the founding principles behind finbox.io, all of the models used to arrive at the fair value estimates are available for review and download. Finbox.io’s pre-built models such as discounted cash flow analysis (DCF), dividend discount models, and earnings power value help investors dig deeper into the fair value of a stock. Users can change the assumptions in their browser or export the full model to Excel or Google Sheets with all formulas intact. Models are built with high-quality data sourced from providers such as Zacks and Quandl. An example DCF analysis for Apple Inc. (AAPL) is provided below.
To view these models, users can find a company using the search bar in the header of finbox.io’s web application, and select from one of the supported models, which include the following:
- Discounted Cash Flows: The basic philosophy behind a DCF analysis is that the fair value of a company is equal to the future cash flows of the company, discounted back to present value.
- Comparable Companies: This technique compares operating metrics and valuation multiples of similar public companies to determine a value for the subject company.
- Dividend Discount Model: A technique for estimating a company’s fair value by projecting dividends and discounting them back to the present value.
- Earnings Power Value: A method to estimate fair value based on a company’s current earnings. The model assumes no growth in current earnings and tends to provide a quick “downside” case estimate of fair value.
- Cost of Capital: A model to estimate the weighted average of the returns expected by a firm’s various capital providers, also referred to as the weighted average cost of capital (WACC).
- Historical Financials: A model that harmonizes a company’s income statement, balance sheet and cash flow statement into a standard format.
Each of these models can be:
- Edited directly in the browser
- Saved for later use
- Shared with friends, colleagues or clients
- Downloaded to Google Sheets and Excel
For more details on financial models, see finbox.io’s working with financial models resource page.
Guided Model Builders
Users can take a quick tour of any model’s assumptions using a guided builder designed specifically for that model. These step-by-step builders present supporting charts and data in a format that makes it fast and easy to understand and adjust the assumptions driving the model.
For example, creating a revenue forecast is the first step in building a five-year discounted cash flow analysis. Our five-year DCF builder for AAPL presents you with relevant data to help inform your forecast, as shown below.
The interactive charts compare Apple’s historical and projected growth to a group of comparable companies as well as analysts’ estimates (data from Zacks Investment Research).
Finbox.io’s stock screener offers an intuitive interface to help investors find stocks that meet given criteria.
With over 250 metrics available to add as filters, investors can find exactly the companies that meet their risk and value objectives. Metrics are organized into five categories:
- Valuation: Market data and fair value metrics. This tab lists filters such as price-earnings (P/E) ratio, upside potential and dividend yield, which indicate how cheap a stock is based on earnings.
- Risk: Debt and credit quality metrics. Only want stocks with a low risk of bankruptcy? You’ll find filters like debt to total capital and Altman Z-Score to add to your screen.
- Efficiency: How efficiently does management use capital to create value? Add metrics such as asset turnover, return on invested capital and profit margin to find the businesses using resources efficiently.
- Financials: This tab lists metrics related to size and earnings such as total revenue and total assets, as well growth metrics like revenue and earnings per share (EPS) growth.
- Forecasts: Looking for growth at reasonable price? This tab lists forecasts for earnings as well as projected growth and margins.
Each screen can be saved and shared. The full set of results can be exported to Google Sheets, Excel or a CSV file. For more details on using the stock screener, see finbox.io’s stock screener resource page.
Finbox.io’s Smart Watchlist has one goal: to keep a user informed on the stocks they care about the most. Users can add stocks to their watchlist by searching for them or adding stock symbols in bulk by copying and pasting from a spreadsheet (Excel, CSV or Google Sheets file). Customizing the view is just as easy, with over 250 available metrics, and the data is available as a download.
Investors can also stay informed on companies with Smart Alerts. Users have the option to receive notifications on the stocks they’re watching for price movements and earnings announcements.
For more detail on managing your watchlist, see finbox.io’s watchlist resource page.