Post on 03-Jan-2016
Walk’n on Wall Street
Lesson 15
Slide 15A
What Does That Mean?
Term Definition
portfolio a collection of investments.
stock quote the price of one share of a stock.
institutional investor organizations that pool sums of money from many members to invest in securities.
mutual fund a professionally managed investment fund made up of a large pool of money received from many investors.
Slide 15B
What Does That Mean?
Term Definition
earnings per share
EPS; the approximate amount of a company’s profit allocated per single share in the company.
price-earnings ratio
P/E Ratio; the ratio of a company's current share price compared to its earnings per share.
rally a period of sustained increases in the prices of stocks or bonds usually following a period of flat or declining prices.
trend a general direction of a market or security over time.
Slide 15C
What Does That Mean?
Slide 15D
Term Definition
downgrade a negative change in the rating of a security
upgrade a positive change in the rating of a security
market cap the number of a company’s shares outstanding multiplied by the current share value.
yield the cash return on an investment, expressed as a percentage of the current market value.
net change abbreviated net chg; difference in dollars between the closing price of a security and the previous day’s closing price.
Reminder Slide 15E
Remember to visit http://c21student.com/flashcards/
to access the online flashcards!
Lesson 15 Objectives
Compare an institutional and individual investor.
Interpret technical data in a stock table.
List ten fundamentals of stock valuation.
Compare the G8, G7, and G20.
Slide 15F
What does this stock table tell you about HnnH stock? What do all
those numbers, symbols, abbreviations, arrow, and
technical information mean?
Slide 15G
Slide 15H
A
B
C
D
52 W Hi/ Lo -shows volatility & trends
Stock = name of the company
Tkr = symbol -assigned by exchange
Dividend
Slide 15I
F
G
E
H
Yld -cash return expressed as % of current price
EPS –company’s earnings divided by number of shares
P/E -share price divided by EPS
Vol -number of shares traded
Slide 15J
J
K
I
L
Hi / Lo -comparison of share price from prior day
Close = final price of the day
Net chg = difference in dollars from the prior day’s close
Market cap (small, mid, large) –share price multiplied by total number of sharesoutstanding
Another method to analyze value: Fun with
Fundamentals Provide a deeper, analytical view with
such things as company reports (especially earnings reports)
Business plan, forecast and earnings reports
Management strengths and strategies
Pending products
Industry and sector growth
Slide 15K
Downgrades and Upgrades
Ratings, ratings, ratings
Common stock ratings: strong buy, buy, hold, sell, or outperform or underperform
Bonds = AAA down to D
Ratings are upgraded or downgraded depending on the company’s performance, problems, or negative events
Slide 15L
The Big PictureSlide 15M
An institutional investor is a professionally managed fund that pools and invests members’ money. Many factors go into analyzing a stock for value. Technical data is provided in a stock table. Stock tables look complicated but are actually easy to read, and are full of important information for comparing stock values. Stock fundamentals are also indicators of value. They include economic forecasts, earnings reports, annual reports, sector and industry growth outlook, management strengths and weaknesses, and a company’s pending products. The investment quality of stocks and bonds is professionally rated. To be financially literate in the 21st century you should understand basic stock valuation methods, and that stock markets are powerful engines driving the economy, as well as avenues to building personal wealth.
Ponder and Predict
One of President John F. Kennedy ‘s favorite sayings was
A rising tide lifts all boats...
Is this a metaphor for the stock market? Some people think it is. What do you think?
Slide 15N