Alec Hogg offers suggestions about where you should look for attractive shares – and how to keep a track on things that will influence their value.

Alec Hogg&nbsp|&nbsp@Moneyweb &nbsp|&nbsp20 April 2005&nbsp

With shares, its the small stuff that matters. Although there is space in every portfolio investment which replicate the overall market Satrix and other Exchange Traded Funds to outperform you need to find and then stick with winning shares.

Unfortunately, there are thousands of others trying to do exactly the same thing. To beat them, you need an edge. In bygone years professionals held all the aces, but with the Internets democratisation of information, ordinary citizens are no longer at a disadvantage. Previously private or expensive information is now readily available, and for the most part its free. Its what and how you use it, which makes the difference.

Lets look at the best sources:

Unit trust quarterly portfolios: Half a million South Africans have a total of R300-billion invested in domestic unit trusts. These are open-ended pools of funds managed by professionals and sold through thousands of financial advisors. The asset managers are obliged to disclose the exact unit trust portfolios every three months at the end of March, June, September and December. Digging around in the details of these portfolios opens a treasure chest for any potential share investor. A little homework will tell you the asset managers favourite shares; which stocks he or she has been buying or selling in the past quarter; and major changes made to the portfolio in the three months.

Although getting into the detail takes some work, at the very least, share investors should compare their own holdings (especially possible purchases) against what is owned by the professionals. To take the slog work out of the exercise, I suggest you use Moneywebs unit trust portfolio tool, updated a month after the end of each quarter. Access it on the Internet at www.fundsdata.co.za/moneyweb/. That way youll be able to see whether the share you want to buy is being accumulated or offloaded by the professionals.

Annual reports: Without question, the annual report (also called the glossy because of the high quality finish) is the best source of information for anyone seriously considering buying a companys shares. Produced within six months of the financial yearend, it provides details on all the important numbers plus strategic and operational overviews by the chairman and chief executive. Few leaders communicate like Warren Buffett of Berkshire Hathaway, but reading any annual report provides invaluable insight into what the business is hoping to achieve in the year ahead.

As executives tend towards conservatism, forecasts of satisfactory earnings growth mean you can pretty much bank on a profit improvement of 10% or more. Keep an eye out for hints on the future dividend policy particularly any references to dividend cover. Every shareholder in every JSE-listed company is entitled to receive their own annual reports. Be sure you get yours by insisting the stockbroker registers your interest at the central register (STRATE). If youre considering a particular share, getting a copy of the annual report takes no more than a phone call to the JSE-listed companys head office. Many companies also have downloadable versions on their Internet websites.

Stock Exchange News Service (SENS) : In 2002, the JSE introduced a free-to-air electronic service which revolutionised the distribution of information about listed companies. Before SENS, companies were only allowed to distribute price-sensitive information after the market had closed. Since the introduction of the service, companies are required to distribute all information as soon it becomes available. As a result, all kinds of official company information is released on SENS through the day, ranging from financial results and directors trades to financial results and announcements about takeovers and delistings. Updated through the day, the SENS section and its archives are among the most popular sections of Moneyweb.co.za. You can also access SENS on the exchanges official website www.jse.co.za.

The media: Clearly were biased, but our focused team of specialist financial journalists provide an excellent service through our two radio programmes, the Moneyweb site, and the Citizen Business section. Investors find the transcripts of our radio interviews with company CEOs especially useful. And as all of the interviews are archived on the Moneyweb site, its easy to look back at what came from the horses mouth. Best of all, its free.