Stock Analysis Skill

Help investors analyze stocks by gathering comprehensive financial data, normalizing metrics for one-time items, comparing historical vs current vs forecasted valuations, and synthesizing market sentiment and news into actionable investment insights.

Information Gathering Phase

Before analyzing, you MUST gather the following information. Ask questions conversationally.

Required Information

Stock Information

• • Stock ticker symbol (e.g., AAPL, MSFT, GOOGL)
• • Exchange if ambiguous (NYSE, NASDAQ, etc.)

Analysis Preferences

• • Investment time horizon (short-term: <1 year, medium: 1-3 years, long-term: 3+ years)
• • Risk tolerance (conservative, moderate, aggressive)
• • Specific concerns or areas to focus on (if any)
• • Comparison stocks or competitors to benchmark against (optional)

Analysis Framework

Perform analysis in the following order, using deep research (web search) for each section.

Phase 1: Company Overview

Search for and summarize:

• •Company name and business description
• •Industry and sector classification
• •Market capitalization
• •Key products/services and revenue segments
• •Geographic revenue breakdown
• •Recent major events (M&A, leadership changes, strategic shifts)

Phase 2: Historical Financial Ratios (5-10 Years)

See financial-ratios-guide.md for detailed ratio calculations.

Valuation Metrics to Track

Profitability Metrics

Financial Health Metrics

Search Strategy for Historical Data

Use these search queries:

• •[ticker] historical P/E ratio 10 year chart
• •[ticker] EV/EBITDA history
• •[ticker] financial ratios historical data
• •[ticker] profitability margins history
• •[company name] annual report financial highlights

Phase 3: Earnings Normalization

See normalization-guide.md for detailed methodology.

One-Time Items to Identify

Search annual reports (10-K) and quarterly reports (10-Q) for:

Revenue Adjustments:

• •Large one-time contract wins or losses
• •Licensing windfalls
• •Settlement receipts
• •Discontinued operations revenue
• •Currency gains from unusual transactions

Expense Adjustments:

• •Restructuring charges
• •Goodwill/asset impairments
• •Litigation settlements
• •Natural disaster impacts
• •Acquisition-related costs
• •Executive severance packages
• •Pension adjustments

Normalization Process

1. •Identify Items: Search [ticker] 10-K unusual items and [ticker] non-recurring charges
2. •Quantify Impact: Note dollar amount and which year(s)
3. •Adjust Earnings: Add back expenses or subtract one-time revenues
4. •Recalculate Ratios: Use normalized earnings for P/E calculations
5. •Track Frequency: Note how often "one-time" items actually recur

Output: Normalization Table

Phase 4: Forecasted Metrics (4-8 Quarters)

Data to Gather

Search for analyst estimates:

• •[ticker] analyst estimates EPS
• •[ticker] revenue forecast next year
• •[ticker] earnings estimates consensus
• •[ticker] analyst price targets

Forecast Information to Collect

Forecast Methodology Explanation

Explain to the user HOW forecasts are determined:

1. •Sell-Side Analyst Models: Investment bank analysts build DCF and comparable company models
2. •Company Guidance: Management provides revenue/earnings guidance during earnings calls
3. •Consensus Aggregation: Services like FactSet, Bloomberg aggregate multiple analyst estimates
4. •Model Inputs: Revenue growth assumptions, margin expansion/contraction, share count changes
5. •Revision Trends: Note if estimates are being revised up or down over past 30/60/90 days

Search: [ticker] analyst estimate methodology and [ticker] earnings guidance

Phase 5: Valuation Comparison

Create comparison showing current vs historical vs forward:

Phase 6: Social Media Sentiment

See sentiment-and-news-guide.md for platform-specific guidance.

Platforms to Search

Sentiment Indicators

• •Volume: Is discussion increasing or decreasing?
• •Tone: Bullish, bearish, or neutral overall?
• •Key Themes: What are people focused on?
• •Influencer Views: Notable investors' positions/opinions?
• •Short Interest: Are shorts covering or building?

Search: [ticker] short interest and [ticker] institutional ownership changes

Phase 7: News Analysis

Recent News Search (Past 3 Months)

Search for:

• •[ticker] news past month
• •[company name] latest news [current year]
• •[company name] earnings report analysis
• •[company name] press releases

Industry News Search

Search for:

• •[industry] industry outlook [current year]
• •[industry] market trends
• •[sector] headwinds tailwinds
• •[company name] competitors news

News Categories to Track

Phase 8: Industry Analysis

Industry Position Assessment

Search: [industry] market size growth forecast and [company] competitive position analysis

Output Format

Executive Summary

## [Company Name] ([TICKER]) Investment Analysis

**Analysis Date**: [Date]
**Current Price**: $XX.XX
**Market Cap**: $XX.XB
**52-Week Range**: $XX.XX - $XX.XX

### Investment Thesis Summary
[2-3 sentence summary of key findings and recommendation]

### Key Metrics Snapshot
| Metric | Current | 5Y Avg | Forward | vs. History |
|--------|---------|--------|---------|-------------|
| P/E | XX.X | XX.X | XX.X | Premium/Discount |
| EV/EBITDA | XX.X | XX.X | XX.X | |
| Normalized P/E | XX.X | XX.X | - | |

Detailed Sections

Provide each section with findings:

1. •Historical Valuation Analysis: Ratios over 5-10 years with charts/tables
2. •Normalized Earnings: One-time items identified, adjusted EPS, frequency of "unusual" items
3. •Forward Estimates: Consensus estimates, revision trends, forecast methodology
4. •Valuation Assessment: Current valuation vs. historical range and peers
5. •Sentiment Analysis: Social media tone, retail vs institutional sentiment
6. •News & Industry Outlook: Key developments, risks, opportunities
7. •Bull Case vs Bear Case: Arguments for each side
8. •Risk Factors: Top 3-5 risks to monitor

Final Assessment

### Investment Conclusion

**Valuation**: [Undervalued / Fairly Valued / Overvalued]
**Sentiment**: [Bullish / Neutral / Bearish]
**News Trend**: [Positive / Mixed / Negative]

**Recommendation Considerations**:
- For [time horizon] investors with [risk tolerance] risk tolerance
- Key catalysts to watch: [list]
- Key risks to monitor: [list]

**Important Disclaimer**: This analysis is for informational purposes only and
does not constitute financial advice. Always conduct your own research and
consult with a qualified financial advisor before making investment decisions.

Analysis Quality Checklist

Before concluding, verify:

• • All historical ratios gathered (5-10 years where available)
• • At least 3 one-time items identified and quantified (or confirmed none exist)
• • Forward estimates for next 4+ quarters gathered
• • Forecast methodology explained to user
• • Social media sentiment from 2+ platforms summarized
• • News from past 3 months reviewed
• • Industry outlook assessed
• • Both bull and bear cases presented
• • Clear valuation assessment provided
• • Appropriate disclaimers included

Wrap Up

After presenting the analysis, offer:

1. •Deep Dive: More detail on any section (ratios, specific one-time items, news)
2. •Peer Comparison: Compare to specific competitors
3. •Scenario Analysis: What-if analysis on key assumptions
4. •Monitoring Plan: Key metrics and events to track going forward