You already know lots of the things your brokerage is good for. It gets you in and out of stocks, bonds, CDs, exchange-traded funds, mutual funds, options, and other investments. It pays you some interest on your cash. It lets you invest on margin, by borrowing money from it -- and paying interest, of course. You may also appreciate that you receive regular statements that summarize your holdings and help you track your progress.
But odds are, there's much more you might get out of your brokerage, if you take some to poke around. I use TD Ameritrade (Nasdaq: AMTD ) , and I rarely do much more with it than place orders for stocks and mutual funds. But recently, I decided to explore its research offerings, because I've long known that many brokerages, big and not-so-big alike, have been beefing them up. (I even wrote about it nearly three years ago.) Some brokerages now offer banking services, too, complete with checking accounts and more.
So off I went, to see what I could find. After clicking on the "Research & Ideas" tab at TD Ameritrade, I entered the ticker symbol for McDonald's (NYSE: MCD ) , one of my holdings. I was first greeted by a bunch of statistics -- the kind that many online quote providers provide, including the recent price, P/E ratio (21.4), a price chart, the dividend yield (1.92%), market capitalization ($64 billion), and so on. (You can get this kind of info right here in Fooldom, too, by clicking on our "Quotes" tab.)
I then clicked "Fundamentals" and got info such as the average annual growth rates over the past five years of earnings per share (13%), revenue (8%), and dividends (34%).
That section also included information on short interest. It's not so critical for McDonald's, but with a smaller company viewed with more pessimism, such as JetBlue (Nasdaq: JBLU ) , this can be useful data. For JetBlue, for example, the short interest for May 2007 was 46.7 million shares, up from 41.1 million in April. The percent of float shorted was a considerable 26%, with five days to cover. These are not insignificant numbers; they suggest that there's considerable shorting going on with JetBlue.
To put those numbers into context, know that XM Satellite Radio (Nasdaq: XMSR ) and its rival Sirius Satellite Radio (Nasdaq: SIRI ) sported only three and two days to cover, respectively, when I checked. And one of my holdings, Select Comfort (Nasdaq: SCSS ) , had 11 days to cover. As the days to cover approach 10, those who are short will have a tougher time getting out of their short position, should they want to. For bullish investors, meanwhile, a high short interest means that a rising stock could lead panicking shorters to drive the price even higher. (Learn more about shorting.)
With my McDonald's research, I next clicked on "Reports" and was greeted with several options. I could look up earnings reports, for example, which yielded access to the First Call Earnings Valuation Report, described as "Buy-Hold-Sell recommendation, with two years of P/E, revision momentum, and recommendation history." I could access "Peers" reports, such as Standard & Poor's Industry Outlook ("Comparison of an individual company to its industry peers, with an analysis of the industry's growth") and Ford Equity Research -- Industry Graph ("Identifies the best performing stocks using graphic comparisons with peer companies"). I could even order up an immediate "Custom Report," which would show informational categories I wanted to view all in one place.
The Wall Street research reports available from many brokerages are perhaps of most interest to investors. At the Fool, we've long advised investors to be careful with these reports. We think you should take all of the buy, hold, and other ratings with a grain of salt, and instead focus on the actual words in the reports themselves.
In any event, TD Ameritrade offered me the following reports for McDonald's:
- TheStreet.com Ratings Report: "TheStreet.com Ratings provides unbiased quantitative analysis combined with qualitative reports that include a buy, hold, and sell recommendation and proven actionable investment ideas."
- Standard & Poor's Stock Report: "Standard & Poor's analysts' overview and valuation, with key fundamental, quantitative, and technical analysis."
- Vickers Insider Trading Chronologies: "The insiders' trades, and whether they influenced subsequent trends. Includes trade details and price chart."
- Ford Equity Research -- Rating Report: "Weekly buy, hold, and sell stock ratings based on a proprietary model that combines earnings trend changes, relative valuation, and price momentum."
- Ford Investor Value Graph: "Clear, graphical representations of a company's valuation, growth, and historical performance."
- Jaywalk Consensus
- Market Edge -- Second Opinion: "Daily technical analysis and market commentary."
These can all help to inform you while you think about the stocks you own and those you're thinking about buying.
Take some time to see what your brokerage offers you. You might even want to look for a greener pasture. Odds are, you can find a better brokerage for yourself -- one that charges you less than you're paying, offers more services or protections you want, or gives you the most exciting mix of research resources. A few minutes in our Broker Center may help you find a better brokerage. Some very reputable brokerages now charge commissions of $5 or less per trade. (Our comparison table may be particularly helpful in this area.)
And finally, consider checking out one more source of investment research -- the Fool's own investing newsletters. They sport strong track records, and you can try out any of them free for 30 days -- during which time you can access all past issues and read up on every recommendation. If you stick around after the free trial, rest assured that we aim to make our newsletter services quickly pay for themselves.
Longtime Fool contributor Selena Maranjian owns shares of Select Comfort and McDonald's. Select Comfort is a Motley Fool Hidden Gems recommendation. JetBlue is a Stock Advisor recommendation. The Motley Fool is Fools writing for Fools.