Stock Analysis Using Seeking Alpha Premium Tools [Video]

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This video’s transcript was generated by a third party. It is not curated or reviewed and is provided for convenience and information purposes only. The accuracy and completeness of the transcript are not guaranteed.

Lawrence Fuller: Hi, everyone. I’m Lawrence Fuller. I’m the Investment Group Leader for The Portfolio Architect, which you can find on the Seeking Alpha Marketplace, and I’m here today to show you how I use Seeking Alpha’s Premium platform to do my stock analysis and research.

So, I’m going to share my screen here with you now, and I am going to review what is currently my largest position in portfolios and the company that actually is reporting earnings tomorrow morning, which I’m hoping will be better than expected. What I want to start with is, telling you that the Premium platform has evolved over time. And what I find amazing is, that there were a variety of other data aggregator platforms that I used to subscribe to, cost me a lot of money. And one-by-one, I’ve been able to cancel those subscriptions because I really find everything I need on this platform.

So, I’m just going to show you some of the things that I look at routinely with my individual stocks. Now, with respect to GigaCloud, what I really like is the multiple ways I can access the information I need, but I’m going to start here just off the top by talking about the Ratings Summary over here.

Now, what this does, it gives you an idea of what SA Analysts, other SA analyst think of the stock, as well as Wall Street Analyst. And then Steve Cress’ Quant System, which I don’t abide by strictly, but I do find it quite useful. What I like to do here is, click on the acknowledgment that I’ll receive by email whenever there’s a change, either from an analyst or – on Seeking Alpha or from the Wall Street analyst or from the Quant System. And I’ll do that with the stocks that I’m following closely so I’m alerted to any change that might occur.

Now, it’s really convenient here to have the viewpoints from other SA analysts, many of whom I follow closely because they do great work, especially sector specific work. And then you just have the general news flow right here. The other thing I find valuable here are these Factor Grades, which are how Steve comes up with his overall ratings. I like to see a positive progression here, especially over the near term. Any upgrades or downgrades might alert me to dig a little deeper into why one has changed. And, scrolling down a little further, I’m just going to go in the order as I go down the screen here.

In terms of looking for other ideas, oftentimes, what I’ll do is, with respect to a stock that I already own, is I’ll look at the sector rankings. And this gives me all the consumer discretionary stocks, including GigaCloud, but I can scroll through here based on the highest Quant Ratings and oftentimes find other names maybe I should consider based on the stocks that I look for. And I’m a GARP investor. I look for growth stocks at a reasonable price. And so, this gives me an easy way to scroll down and look for maybe stocks that are trading at relatively low multiples, well below the market’s P/E of 21x. And then if I find one, I will dig a little deeper and see if I can add that as a name to my watch list of companies that I might want to purchase.

So, let me scroll. Let me go back here to the main page. I’ll just type in GCT again. And okay. Working down the list here. As I keep scrolling down, the next thing I typically focus on, with respect to revenue and earnings is, I like to see a consistent uptrend in both, which is easy to access here. I can look at it either on annual basis or quarterly basis, and I could do the same thing with respect to earnings per share. Obviously, we want to own stocks that are outperforming their estimates, and this is a great way to look and see what the relationship is between the actual numbers reported versus those that are expected.

And with GigaCloud, they’ve been consistently outperforming. There was one soft quarter here in the fourth quarter, and that was because of an acquisition they made. So, they had a charge that reduced the number, but overall, have nice steady earnings beats here for the company.

Earnings revisions. I want to own stocks that have, where analysts are upgrading the estimates. And we haven’t had any revisions here of GigaCloud in the last three months. But easy access here if I want to dig a little deeper. Again, this is not showing me any changes in estimates over the last three months, but when those do pop up, that’s something that I want to focus on.

The other things I find real valuable here, go a little further down here, multiples. Obviously, GigaCloud trading at just 10x this year’s earnings. I like to find stocks that are growing at a faster rate than their multiple. And moving forward here we do see that in 2027, we have a big earnings expectation jump for GigaCloud. I think these numbers here, $3.31 for this year, are considerably lower than what they’ll do. And as far as other data here, there’s such a tremendous amount.

One of the numbers that I really focus on is, the return on equity in terms of profitability. Return on equity, simply put, is the net income of a company divided by shareholder equity, which is assets minus liabilities. And that will range depending on sector. The utility sector, a good ROE might be 5% or 6%, whereas for a technology company that’s asset light, it might be as high as 30%. Microsoft has a 30% return on equity. And what stands out for me with respect to GigaCloud is that it also has a return on equity of 30%. Hugely profitable company, and I want to see that – typically, when I’m looking at stocks, this is one of the first thing I’ll look at, is to see what the return on equity is for the company. Again, accessible right on the very first page here.

The other thing I focus on is capital structure. How much cash does the company have? How much debt does it have? In the case of GigaCloud here, tremendous amount of cash on the balance sheet and a lot of – the debt is really long-term leases from warehouses that they use to house their large ticket items that they sell. So, there’s virtually no debt on the balance sheet.

And other factors I’m going to look at here, okay, insider buying and selling. Sometimes, you see, if you see a lot of buying activity by insiders, that’s generally a very positive sign. Just the opposite when you see sells, unless you dig a little deeper and understand why in the case of a selling activity going on for GigaCloud as I’ve – because I’ve been speaking to management on a fairly regular basis, the founder, Larry Wu here has been selling stock.

He owns 20% of the outstanding shares. And so, he has been liquidating on a program basis to diversify his net worth, which is completely understandable. The same goes for the COO. Who’s been with GigaCloud from the start when Larry founded the company.

Short interest. Okay, 6.5%. This has come down for GigaCloud from what was about 15% six months ago. So that can also be a positive or a negative. In this case, given how strong the fundamentals are, I wish actually the short interest is a little bit higher than it is today, but there would be more pent-up buying as the fundamentals improve. But again, this is another number that I like to look at for any stock that I’m tracking or that I own. And then at the very bottom of the page here, oftentimes, the GigaCloud report earnings tomorrow morning. I have several other companies reporting. I don’t have a lot of time to sit there and listen to the conference calls.

So, what I really love about this platform is, I can go straight to the transcript right here. I can read through the questions that the analysts have asked, the responses from management, and I can also click on the earnings presentation, which is sometimes just as valuable to look at the metrics, see how they change, and see what the outlook is for the company moving forward if anything has changed.

So, last would be the SEC filings. I like to read the quarterly filings. They’re typically much more extensive and detailed than what you’ll find in the quarterly presentation or even on the earnings call. So, that’s another thing that I’ll focus on. And, the point here is, that I have all this information just on one page, and I don’t have to jump around from one site to the other. So, great information.

I’ll say, another thing here that I really like is, they have added this options page. Now, if you trade options, I typically just sell options. I like to sell covered calls. I also like to sell naked puts purely for the purpose of income as opposed to speculation. And even though I can’t trade, these options on this platform, this is a lot easier for me to go and look and see what types of premiums I might collect as opposed to going to my brokerage accounts and accessing the trading screen.

So, this is just a real quick example. For example, if Giga has a really solid earnings report tomorrow, which I expect, and the stock spikes up into the 40s, I might want to look to sell some covered calls. So, what I can do right now is, I could take a look at, say, the March or I’m going to drop down here to April and just consider what the 40s are selling for or the 45s. And it just gives me some early heads up idea of which contract I might sell. Saves me a little bit of time. So, again, having that on this homepage is really valuable.

Anyway, I think that’s just a general overview of how I use the homepage. But, again, I could dig, I could spend 30 minutes here digging through all these different tabs here to go deeper and deeper into the stock, and it’s just been a phenomenal tool that just seems to keep getting better.

So, that’s an example of how I use the Premium platform, and I hope you’ll check out my marketplace site, Portfolio Architect, and take another look at that and look at the companies that I own, as well as the ones that I’m watching. And with that, have a great day.

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