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Under the Hood: What You Should Know About the YCharts Tool

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There is certainly no shortage of investment research and analytical tools available today. However, every now and then a new application hits the market and makes a splash. YCharts may well be today’s wave-maker. This is one of the most impressive applications I’ve seen in over 25 years in the business. In this article, I’ll explain what it is, how it works, and most importantly, why it is gaining such traction in the investment community.

(Disclaimer: I am not a subscriber nor am I receiving any remuneration from YCharts for writing this article.) 

YCharts is a web-based tool with an extremely deep reservoir of investment and economic data. It includes 22,000 equities with 5,000 metrics or data points on each. It also contains closed-end funds, 2,000 ETFs, and 35,000 mutual funds, each with about 200 data points. For those interested in economic data, YCharts offers 450,000 economic indicators on countries around the world. Yes, YCharts is indeed deep. It’s also highly customizable and is available in three levels. 

One of the most impressive aspects of the program is its integration with Microsoft Excel. YCharts becomes part of the Excel toolbar and offers incredibly dynamic functionality for the astute investor and advisor. To explain, let’s consider an example.

Assume you are following 10, 20, 30, or more stocks. YCharts Excel integration simplifies this task. The first step is to select the data points you desire from the 5,000 included in the program. The next step is to create the template (each data point would be a separate column). You can even write your own formulas using the data points you’ve selected. As mentioned, each column contains a different metric and each row contains a different security. Best of all, there is no limit on the number of data points (columns) or securities (rows) you can select. Each time you open the spreadsheet, the data will update automatically. You can even add new securities to the list and the data for that company will populate immediately. 

Fundamental Research, Analysis and Alerts

Most people equate stock charting with technical analysis. However, YCharts offers a great deal of fundamental data in its charting tool. In short, you can create a chart using any of the 5,000 data points available for each company. This can be especially useful if you want to compare companies. For instance, you can create a chart which includes the trailing P/E on several companies. Perhaps you’d like to view a chart with the TTM revenue for five different healthcare companies. This tool provides a great way to compare companies using data other than just price or performance. You can also create a chart with company specific data and one or more economic indicators. This is one more feature which sets YCharts apart from the competition. 

YCharts is one of the best tools I’ve seen for technical analysis. It contains about 30 technical indicators and offers something you rarely see in similar products. In addition to the technical indicators, you can create a search using any of them. For example, let’s assume you wanted a list of stocks that are in oversold territory. You could search for all stocks with a Relative Strength Index (RSI) below 30. Again, any technical indicator can be incorporated. 

There is no shortage of information on the information superhighway. Assimilating it, however, is another matter. How can you efficiently track the pertinent data, news, etc., on companies you follow? YCharts tracks data from a vast array of sources including social media giant Twitter. Then, users can establish multiple alerts on a company and receive notification by email or via the alerts section of the tool. There is no limit to the number of alerts you can establish on a particular security. 

YCharts’ Pricing Levels

YCharts was co founded by former Google employee Shawn Carpenter in March 2010. Current clients include hedge funds, portfolio managers, consulting firms and individual advisors. According to Carpenter, the company’s gross revenue has doubled year over year and he expects this trend to continue. Some of the more notable investors in the company include Morningstar and Reed Elsevier, a leading provider of information solutions for professionals. 

As mentioned, YCharts is available in three levels with each building on the previous level. All levels include the same number of securities and data points. Subscribers can choose between Lite at $480/year, Standard at $1,200/year or Professional at $3,600/year. To get the Excel integration I spoke about, you’ll have to select the Professional level. 

How does this product fit into an advisor’s practice? As a research tool, I haven’t seen anything better , for the price. However, because it doesn’t include a wide array of asset classes, it won’t produce portfolio reports, unless of course the portfolio consists of the assets it covers.

Therefore, I see it as a niche tool. As I was learning about it, I expected the cost would be much higher. With the Excel integration, the ability to search using any metric or technical indicator, and the depth of data included, YCharts is one of the best values around.

Finally, with investments from Morningstar and other notables, credibility is not an issue. In this authors’ opinion YCharts is worthy of your consideration.


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