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Understanding Sectors and Industries
Posted on May 16, 2016 by Andy Hayes

Both our SFTW Investor and SFTW Trader applications make frequent use of the Sector and Industry data contained in our stock database.  Sectors and Industry data can help you spot trends across the market, encourage market diversity across your stock picks, and assist in your research efforts for finding undervalued stocks.

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Sectors vs Industries

The terms sector and industries are often used interchangeably, and while they are both tools or organizing stocks, they are not necessarily the same thing.  Sectors are large, broad categories for breaking down the industries in an economy.  We have 8 sectors in use in our applications: basic materials, consumer goods, financial, health care, industrial goods, services, technology, and utilities.

Industries are underneath sectors, and they further refine the categorization of stocks.  For example, in the consumer goods sector, industries include appliances, recreation goods, electronic equipment, auto parts… there are over a hundred industries in our database.

Sectors in SFTW Investor

In our Investor application, you’ll find that each of your watchlist has a “watchlist composition” feature that highlights the sector diversity of your watchlist.   Sector diversity is also a key feature in a few of our Push Button Portfolio feature.

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The Investor app has a Safety Score tab where you can view the overall safety scores of each sectors, as well as seeing the top industries (by safety score) in each sector, and the top stocks (again, by safety score) in each industry.  This can help you explore new sectors and industries perhaps more unfamiliar.

To see the Sector & Industry of an individual stock, just go to the stock’s detail page – it is listed right under the stock name.

Sectors in SFTW Trader

While our SFTW Trader app is a much simpler experience in terms of functionality, stock sectors are actually a key feature in the app, because the daily list of undervalued stock recommendations are sorted by sectors.  This helps you see, at a glance, which sectors are trending that day.

Both the sector and stock industry are displayed in the listing.

How to Use Sector/Industry

A stocks’s sector or industry is just one of many factors that can influence stock movement.  For example, a hot industry can lift a stock price without the underlying fundamentals.  The opposite happens too – downward trending sectors can create opportunities for investments with long-term potential.

Use the sector/industry information in our applications as another data point to help you spot the investing opportunities right for you – they’re just an additional part of the story.

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Written by Andy Hayes

is a lifestyle expert and runs his own online magazine, Plum Deluxe. Andy is based in Portland, Oregon.

 
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