Stocks

STOCK WHAT DRIVES STOCK PRICE SUPPLY AND MARKET CAP DEMAND EARNINGS PRICE MOVEMENT On the most Publicly Price movement The value of fundamental reported reflects what a company is level, supply earnings are investors feel a its market and demand the profits a company is worth capitalization in the company now and in the „which is the market makes. This future. stock price determine along with multiplied by stock price. earnings the number projections are of shares major drivers of outstanding. investor activity. EVALUATING STOCK THE PRICE-TO-BOOK RATIO (P/B) The price-to-book (P/B) ratio represents the value of the PRICE-TO-EARNINGS RATIO company if it was liquidated (P/E) and sold today. P/E ratio can be thought of as how long a stock will take to pay back your investment if there is no change in the business. THE PEG RATIO Price Earnings Growth ratio incorporates the historical growth rate of the company's earnings. DIVIDEND YIELD Dividing a stock's annual dividend by its price represents the interest on your money with the additional chance of growth through appreciation of the stock. WHAT ABOUT PENNY STOCKS? Penny stocks are common shares of small public companies that trade at low prices per share and can produce major profits for savvy investors willing to take on additional risk. Penny stocks may not have earnings or dividend yields as stock price drivers. 1011 10 More speculative than other Learning to recognize When evaluating penny securities, so they're lower patterns of promotion and stocks, contract wins with priced and have large price movements is key for bigger companies and new potential for rewards if the shorting penny stocks. product announcements company's product is a hit. that could drive earnings later are keys to hone in on. WHEN IT'S TIME TO INVEST Determine your Using a When it comes to Stick to a plan level of risk and combination of background and don't be build a portfolio valuation information and afraid to cut that suits your methods provides researching a losses quickly. circumstances and a fuller picture of company, day trading timing. the real value of a software is key, but stock. the news and your own research should remain priorities. TIM TIMOTHYSYKES.COM SOURCES: http://www.forbes.com/2009/04/14/investing-stocks-moneybuilder-personal-finance-value.html http://www.investopedia.com/articles/fundamental-analysis/09/elements-stock-value.asp http://www.investopedia.com/university/stocks/stocks4.asp http://en.wikipedia.org/wiki/Stock_valuation