Comments on the Jefferies' Database 1

I thought that after our last meeting that I might have a go in 'whacking' in the data from the Jefferies Database book that you gave me and playing around with it.

But with stock coverage running to a massive 62 pages long I had second thoughts!

That of course is one of the potential strengths of the Jefferies Database, in terms of breadth and depth of the stock coverage Jefferies Database, there is a lot to work with here, with lots of US sectors being very well coverage.

The first task would be to see if some sort of electronic version exists. I imagine there must be at least one spreadsheet somewhere, which is regularly updated somewhere to publish this document, possibly more with more data than is published here. Getting hold of that on a regular basis would be a great start and it would enable you to take the basic data, update earnings regularly by cutting and pasting new estimates over it, and building it out by adding new lines/pages of data from other sources/calcuations.

If breadth of stock coverage is an obvious strength of what you have already, the biggest weakness is a big lack of uniformity in the data covered for each sector. A simple comparison of the data items displayed for the two sectors in the samples included here shows the problem.

The data included in common across all sectors is extremely limited and comprises not much more than 'Recommendation', 'Target Price', 'Price', 'High', 'Low','Market Cap', 'No. of Shares', 'EPS' estimates and 'P/E', 'Ticker' and 'FYE', 'Financial Year End'.

Just about all the other data chosen to be displayed varies wildly by sector.

In the two examples shown above, for one sector the addition data includes

1. Operation Income Growth Rate
2. EBIT Margin
3. Working Cap/Sales
4. ROIC
5. Net debt

For the other sector

1. Revenues
2. EV/Revenues
3. Price/Book
4. Book Value

have been selected. ie. not a single item in common! Nor are these two models by any means the only combination of data, which varies in just about every sector.

I'm sure these addition data items have been chosen on the basis of what the Head of the Sector Team considers most important for the sector that they are following. But unless their is some other spreadsheet somewhere with data items gathered in a more systematic and uniform way, this is not going to give you very much for comparing stocks across sector/aggregating. In fact, in terms of performance and valuation data, future projected earnings growth and P/E are about your lot!

There are probably next steps to consider are:

1. Loading up the data you have into a spreadsheet or similar- preferably directly from a spreadsheet for which you will be able to receive regular updates.

2. Expanding the data with a second/several additional sheets of data, fed by links for say 'Price', 'Price performance data' -whose absence speaks volumes about the 'unloved' nature of this database, as knowing the valuation stats in the absence of share price movements makes it pretty dull document-and stuff like earnings relative to consensus, changes in earnings estimates etc.

3. Thinking about collecting a wider and more uniform data set, at least for European stocks, on stuff such as Revenues, EBIDTA, Net Debt/EV, DPS and the sort of things that have gone into the sector data items that someone has picked out.

4. Adding more data (such as historic numbers Etc.) from an outside data source to fill in further 'back data'.