Value Line Review – Do You Need Their Research?

About Value Line

Value Line is a major player in the stock research and analysis world with multiple offerings for retail and institutional investors. Today, we’ll look at the Value Line Investment Survey – Smart Investor product, which includes analyst coverage for around 1,700 stocks that are small-caps or larger. 

Value Line offers a wealth of fundamental data for all the stocks in the database, with a healthy dose of analyst projections and commentary. The service is primarily geared towards long-term investors and stands out for offering information on whether a company is a good buy at present.

Value Line Pricing Options

The Value Line Investment Survey – Smart Investor service costs $598 per year. You can sign up for a two-week free trial to test out the service before committing.

Value Line Features

Market Update and Newsletters

For the most part, Value Line takes the long view of investing. Which makes it strange that one of the service’s most central features is daily market updates. These come out each morning before market open and cover everything that happened in the market the day before.

The daily market updates vary, but generally focus on economic releases, earnings reports, and other notable trading trends. They don’t necessarily stick to the companies covered by the Investment Survey, although the survey includes most of the major US stocks.

In addition to daily newsletters, Value Line analysts send out two weekly newsletters. 

The first, “Selection & Opinion,” covers four model portfolios that Value Line manages. Three of the four model portfolios are geared towards aggressive, moderate, and conservative investors, respectively, while the fourth is built for dividend investing. These portfolios only include 20 holdings at a time, and the investments are meant to be held for several years at a minimum, so they don’t change much from week to week.

The second newsletter, “Investment Research,” introduces some of the new research reports put out by Value Line’s analysts over the course of the week. It also highlights any companies for which Value Line is initiating coverage.

Research Reports

Value Line issues short research reports (usually several paragraphs each) that update investors on the companies that are in the Investment Survey. Most of the time, these reports come out in a day or two following earnings reports and briefly summarize the gist of the company’s statement and outlook. If there are any changes to Value Line’s forecasts for a company’s future financials, the research report will note them. Somewhat surprisingly, though, the research reports don’t provide any coverage about what happens to a company’s stock in response to its earnings report. These reports are interesting, but nowhere near as comprehensive as reports from Motley Fool, Stansberry Research, or other research-oriented companies.

Stock Coverage

Individual stock pages are at the heart of Value Line. These pages include a truly massive amount of financial data. For example, you can look at cash flow statements, earnings and dividend growth, and valuation over time.

The real value of these pages, though, lies in the rank data that Value Line superimposes on each stock. These ranks are generally contributed by analysts at the firm who follow each stock, and you can find the latest research report for any company near the top of the stock page.

Most important are the “Safety,” “Timeliness,” and “Financial Strength” ratings. Safety, according to Value Line, is a relative rank of how risky a company is relative to all of the other companies covered by the Investment Survey. Timeliness stands out because it rates whether a company is a good buy at the present moment, as opposed to in general at any time.

Financial strength is less unique, although Value Line does a nice job with it. You can quickly see how a company’s financial strength grade compares to its direct peers, it’s broader industry, and all the companies in the Investment Survey. Just beware that for many companies, their peers aren’t included in the Investment Survey – so you’ll be able to see how the company under investigation compares in terms of ranking, but you won’t be able to see the names of the companies that Value Line considers peers.

Another helpful piece of information that Value Line provides is 3- to 5-year projections for earnings growth and return potential. For aggressive investors, these projections can be extremely useful for putting together a portfolio of companies projected to beat the broader market.

Stock Screener

Value Line also provides a stock screener that allows you to find specific companies based on fundamental criteria. This screener is well-designed and enables you to use any of Value Line’s company rankings to sort stocks. Even better, you can screen companies based on their anticipated 3- to 5-year returns.

You can save any number of custom screens to your Value Line account to return to them in the future. In addition, Value Line has 15 preset screens that cover basic metrics like highest dividend yields, lowest P/E ratios, and best performance.

Customization And Layout

Value Line’s layout can be somewhat confusing. Not all features that are displayed in the web interface are unlocked for Investment Survey users, and several of the menu options seem redundant. That aside, the platform makes it easy to search for individual stocks, set up a new screen, or browse research reports.

Customization outside of the stock screener is relatively limited. However, some users might appreciate that you can expand or contract specific the windows displaying some metrics when looking at data for a single stock.

Value Line Platform Differentiators

Value Line is one of several stock research and analysis tools out there, such as Zacks and TipRanks. However, given this firm’s reputation in the investment analysis world, the company’s analysis comes with some extra weight.

Having access to research reports and commentary from analysts who have followed a stock or industry for years is a major plus. Also, being able to easily see how a stock’s financial strength compares to that of its peers or the broader Investment Survey helps with decision-making about which investments are worthwhile. It would be nice to see more or larger model portfolios under management, but the stock screener makes it relatively easy to find good investments based on Value Line’s analysis.

What Type Of Trader Is Value Line Best For?

Value Line is a tool designed with long-term fundamental investors in mind. The platform is built around investment time horizons of at least three years, and most of the analyst commentary ignores short-term technical data in favor of trends in revenue, earnings, and growth. This service seems particularly suited for active retirement investors who want to take control of their portfolio but need reliable, trustworthy information to do so.

Pros

• In-depth research for 1,700 US stocks
• Includes “Timeliness” grade for every stock
• 3- to 5-year investment return projections
• Well-built fundamental and rank stock screener
• Daily market updates

Cons

• Very expensive
• Not suitable for investment time horizons less than three years
• Doesn’t unlock data for all US or Value Line-covered stocks