Pick a Stock Guides - Articles
Stock Market Risk Premium
Risk premiums are a suitable yardstick for judging the worthiness of investing your money in particular stocks. In order to achieve better results on the stock market you should harmonize the level of risk with the rewards you expect to get from the particular stock.
Investing According to Dow Jones Industrial Average
Many average investors are confused about the exact meaning and impact of the Dow. Investors that invest in index mutual funds or exchange traded funds, which follow the behavior of the Dow will be extremely satisfied to hear when the Dow has hit a high record.
Stock Beta Value
Market risk and volatility of investing in stocks is commonly measured by what is called beta. It is a tool that facilitates investors’ choices regarding the type of investment that best suites their risk tolerance.
Pick the Best Stock Type for You
Stocks carry their risks in terms of volatile prices, but over the long term they bring returns offered by no other investment solution and it is only a matter of the right stock pick for your needs.
Preferred Stocks Disadvantages
Despite their name, preferred stocks are less preferred than common stocks. So, unless you have firmly decided that a particular preferred stock exactly meets your financial goals, you should get familiar with their disadvantages.
Cyclical vs Non-Cyclical Stocks
In order to achieve a balanced portfolio of stocks both cyclical and non-cyclical stocks should be included. This should be done in order to be able to better face the changing cycles of the economy and the market as a whole.
Company Market Capitalization
When you decide on the investment in a particular stock you should consider the size of the company that issues it. This is required since companies of different sizes react in a different way to market conditions and changes.
Dividend Yield Calculation and Drawbacks
In order to evaluate whether a particular stock represents a good investment in dividend terms, investors often use dividend yield as a measurement. It represents the percentage that the stock returns as compared to its price.
Book Value Explanation
When deciding on the investment in a particular company through the purchase of stocks of the company, many investors refer to its book value as one of the components that guide their decision regarding the investment.
Dividend Payout Ratio Calculation
The meaning behind Dividend payout ratio (DPR) is the money that is paid out in the form of dividends by the company to its shareholders. Some financial experts say it is an important measurement, whereas others strongly disagree.
Dividend Yield Explanation
Dividend investors, searching for a stock that will return them stable current income, should use Dividend Yield in their comparison of the different stocks available on the market, which fall under the investor’s consideration.
Operating Cash Flow Implications
When deciding on the investment in a particular company you should not overlook a company’s cash flow. Investing in a company with a negative OCF may be a risky enterprise.
Stock Valuations - Key Interest Rates Relationship
The valuation of a stock, and particularly its risk-free rate, is directly related to the key interest rates that the Fed adjusts at its meetings. This relationship illustrates the potential expectations regarding the investment in a particular stock.
Price to Book Ratio Calculation
Value investors search for companies that have been overlooked by the market. When deciding on a particular company, value investors look at such indicators as earnings growth, price to book ratio (P/B) and several others.
Return on Equity Calculation and Drawbacks
A measurement for evaluating the efficient use of resources by a company in producing earnings for its shareholders is the Return on Equity (ROE). Many investors successfully apply ROE as a tool for finding competitively advantageous companies.
How to Benefit from Short Sellers
Use short-interest ratio and the number of short sellers to evaluate the stocks and their future price movements.
Earnings per Share EPS Calculation
When deciding on the investment in certain stocks, many times investors are facing the challenge of comparing stocks from different industries and types. A useful tool for comparison can be earnings per share or EPS.
PEG Ratio Calculation
A major characteristic of the stock market is that it is directed toward the future performance and projections. Aside from the P/E for measuring the future earnings growth is the PEG ratio.
Simple Return vs Compound Annual Growth Rate Formula
The simple return and compound annual growth rate formulas will help you calculate the returns on your investment. This will further facilitate the identification of your current position as compared to where you should be regarding your financial goals.
Price to Cash Flow Ratio vs Free Cash Flow
Both free cash flow and price to cash flow ratio present a useful way to find out the valuation the market assigns to the stocks of a particular company.
Institutional Investors and Their Influence on Stock Trading
Before you decide on the purchase of a particular stock it may be useful to observe the attitude of large shareholders toward this stock. See whether they are buying or selling since their actions may reflect on the price of the stock.
Company Valuation Methods - Debt Evaluating
One of the factors you should consider when evaluating a stock is interest rates. This is especially important if the company from which you possess stocks has a debt which it should cover.
Company Valuation Methods - Management Effectiveness Ratios
Before you purchase a stock, you should make an evaluation of it using many different criteria. One of them concerns the management of the company and its way of using the company’s resources.
Company Valuation Methods - Debt Evaluation Formulas
When evaluating the possibility of purchasing a particular stock, debt of the company may represent a factor that can influence your decision.
Determining the Right Stock Price
Many times the market doesn’t price a stock in a realistic way. One way to find whether the market has undervalued or overvalued a particular stock is by using the price/sales ratio.
The Importance of Earnings in Evaluating Stocks
When deciding on the purchase of a stock, an evaluation of the latter is required in order to determine whether its price accurately reflects the value of the company. Stock evaluation involves the examination of the earnings that the company generates for its shareholders.
Price to Sales Ratio Calculation
Evaluating the stocks of a particular company is required before you jump with both legs into investing with it. The Price to Sales (P/S) ratio comes to assistance when you need a measurement of the worthiness of young companies just coming on the market .
Price to Earnings Ratio Calculation
When evaluating a stock, most investors refer to the Price to Earnings (P/E) ratio in order to make more reasonable investment decisions. It is the ratio most often used by investor when it comes to evaluating stocks.
Cash Flow Valuation
The valuation of a stock includes the application of many criteria. One of them most often used by investors is cash flow.
Calculate Return on Investment
In order to better understand the return you get from your stocks, you need to master several formulas. The formulas will help you calculate the returns on your investment.
Beta Ratio Basics
In order to measure the volatility of the price of a stock relative to the rest of the market and to determine the level of risk a particular stock carries you should apply the Beta ratio.
Relative Strength Indicator
Relative strength represents an indicator that assists investors in their stock picking. Additionally, it helps them evaluate the investments they hold relative to other investments.
Non-Financial Characteristics of a Successful Stock
When you make an evaluation of a particular business, the financial indicators are only one part of the picture. There are many other factors and this article aims to introduce some of the traits a successful business should possess.
Per-Share Price vs Market Cap
Many beginning investors consider the per-share price of a stock as an indicator of its value. However, in order to determine the value of a company, we should identify its market capitalization (also known as market cap).
Dogs of the Dow Investment Strategy
If you don't have much time for making investment decisions, then the Dogs of the Dow investment strategy is what you are searching for. This is so, since it eliminates the research and guesswork from your investment decision making.
Avoiding Bad Stock
Most investors often fall in the simple trap of believing someone who tells them that a particular stock is the next winning bet. However, you should be very cautious and try to avoid bad stocks, which only look profitable but are financially hollow.
Value Stocks vs Growth Stocks
Growth and value stocks are commonly used terms related to stock investing. The following article provides clarification on the meaning and characteristics of these stocks so that you are facilitated in your choice of each of them.
Identifying a Value Stock
If you are a value investor there are some important financial numbers and business fundamentals you should look at when examining a potential value candidate.
Business Fundamentals vs Management Quality
The question business fundamentals vs. management quality importance is a controversial one. Many claim that management quality is more important than the fundamentals of the business, whereas others completely disagree.
Stock Value Focus
You should be aware that price and value are different concepts and they should not be confused. For investors value is what matters.
Tips on Winning Stock Picks
If you are perspicacious enough you will be even able to spot items that are still not popular enough but have the potential to become market leaders in their sector.
Mega Cap Stocks in Your Investment Portfolio
If you expect that bad economic times are nearing you should make sure that you put mega cap stocks in your portfolio in order to benefit from the relative security provided.
How to Select a Winning Stock from a 52-Week List
Many investors looking for a winning stock face the dilemma of whether to buy a stock that is part of the top 52-week high list or a stock that is part of the 52-week low list.
Management of Investment Decisions Through Stock Screens
If you decide to use a stock screen then you will be able to specify certain criteria and according to them the screen will sift the stocks that possess the determined characteristics.
How to Select a Winning Company
Look for the signs listed here if you are looking for a company that will provide the next unique product that will lead to great returns.
Earnings Estimates and Stock Selection
Most investors tend to analyze past stock performance when they make decisions regarding an investment. However, stock prices are typically determined by the earnings a company will generate in the future.
Market Leaders and Stock Investing
Many investors tend to bet on small companies which still have not established their names on the market and hope that they will soon catch up with the leaders and even get ahead of them.
Small Cap Stocks Opportunities and Risks
Small cap stocks can be both extremely beneficial in financial terms and disastrous to your hard earned money. Even though small cap stocks carry a great degree of risk, you might consider investing in them.
Simple Stock Selection Tips
Follow these two simple stock selection tips and you will manage to establish a better investment portfolio that corresponds to your financial goals.
Value - Growth Stocks Comparison
Depending on your long term financial goals you can choose either value stocks or growth stocks or even the both of them.
Price to Sales Ratio (PSR) Explanation
There are many tools you can use in order to valuate a stock. One of them is the price/sales ratio (PSR).