Research Tools Grade: A
Overview:
However you want to measure it, Fidelity has a great selection of research tools at your disposal. Featuring an enormous amount of daily market commentary and individual stock research, there is plenty to keep any investor busy. The advanced features such as the stock screener, back testing tool and alerts tool are all excellently implemented. Most online brokers seem to have simply pieced together their research section as an afterthought. Fidelity has differentiated themselves by carefully constructing a comprehensive and cohesive package over many years. Fidelity research receives our highest grade.
Details:
The main Fidelity Research page (click on images for larger views):
According to Fidelity they have "more free independent research than any other online broker. Research reports from 13 different independent firms, covering over 4,500 companies. Fidelity offers the broadest range of free independent equity research available from a major brokerage firm, based on a survey of competitors' online offerings performed in June 2007. Competitors surveyed include Charles Schwab, E*Trade, Scottrade, and TD Ameritrade."
Daily market commentary is available from Argus Research, Decision Economics, The Hightower Report, Ned Davis Research and Standard & Poor's. Stock specific research is provided by an equally large number of companies.
Analyst upgrades, downgrades and other events are shown collectively in the News & Insights section. Here we can see all of the analyst activity over the past week:
The analyst opinions page shows the recommendations per firm and even includes an accuracy score per source. Here is a look at the analyst opinions for General Electric (GE) with the most accurate forecasters shown at the top:
The standard accounting statements (balance sheet, income statement and statement of cash flows) are also available for all stocks. Here is a look at the balance sheet for Royal Gold (RGLD) with expandable/collapsable nodes:
The stock screener has an enormous 148 indicators to choose from, ranging from company fundamentals, growth, profitability, chart technicals and analyst ratings. Quite impressive. Here is a screener that we created against market cap, dividend yield, price/earnings ratio (P/E) and price/sales ratio (P/S):
Fidelity has a back testing tool that allows users to test trading strategies based on market history. The tool is broken up into 15 strategy types which includes moving average crossover,daily dip buyer and gap filler. This tool has been greatly improved since our initial review in 2008. We played around with the dip trader strategy. Users select a stock, a dollar amount, time period, prior trading day's decrease in price, days to hold the position and an upside price target. The tool then returns historical results of the strategy including a full list of activity and an accompanying chart.
Here is an example we entered to buy Chevron (CVX) over the past five years when the stock lost 3% or more the prior trading day. Based on the historical results we will not be implementing this strategy any time soon:
A chart also shows the historical buy and sell signals:
As you can see by this example, frequent trading of CVX on the dips has resulted in poor short term returns but has worked out for the long term investor. In our experiments with other stocks and scenarios, it was interesting to note that even with stocks that had positive short term trading results, commissions generally ate up a majority of the gains.
Fidelity offers an extensive alerts system. There are eleven alert categories in total, ranging from account balances, dividend events, price triggers and initial public offerings (IPOs). Alerts can be set up to send to several devices simultaneously, including desktop formatted email, mobile formatted email and text messages. Here is a look at an alert we designed to trigger if Ford stock falls below $16 or if it drops 2% during a trading session:
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