Forward P/E Ratio = Stock Price/Estimated earnings per share. This compares to the P/E ratio which is based on known earnings per share.
Friday, April 29, 2016
Thursday, April 28, 2016
What is a dividend?
A dividend is the amount of cash that a shareholder receives from a company. Dividends are typically paid in quarterly. Some companies like to pay on a monthly, semi-annual and annual basis.
Posted by William at 9:06 AM No comments:
Wednesday, April 27, 2016
What is return on equity?
Return on equity (ROE) is defined by the following formula—(Net Income/Stockholder’s equity) x 100. Sometimes investors use this formula—(Net Income/Average Stockholder’s equity) x 100. I like to see companies with ROE of 12% or more.
Posted by William at 8:58 AM No comments:
Tuesday, April 26, 2016
What is long-term debt to equity?
Long-term debt is defined by the following formula: (Long-term debt/Stockholder’s equity) x 100. I like to see companies with long-term debt amounting to 50% or less of stockholder’s equity.
Posted by William at 11:27 AM No comments:
Monday, April 25, 2016
What is cash to stockholder’s equity?
I like to use a measure called cash to stockholder’s equity defined as (Cash/Stockholder’s Equity) x 100. I like to see companies hold cash amounting to 20% or more of stockholder’s equity to get them through tough times, expand, pay dividends, etc.
Posted by William at 6:44 PM No comments:
Friday, April 22, 2016
What is profit margin?
Profit Margin = (Net Income/Revenue) x 100. Investors desire this percentage to stay steady or increase over time.
Posted by William at 1:27 PM No comments:
Thursday, April 21, 2016
What is operating margin?
Operating Margin = (Operating income/Revenue) x 100. You would want this percentage to stay steady or increase over time. Moreover, I prefer that operating income exceeds interest expense by five times.
Posted by William at 10:30 AM No comments:
Wednesday, April 20, 2016
What is gross margin?
Gross margin = (Gross profit/revenue) x 100. Investors want to see this percentage stay steady or go up over the long term.
Posted by William at 9:58 AM No comments:
Tuesday, April 19, 2016
What is current ratio?
Current ratio = Current Assets/ Current Liabilities. I like to see 2 or more on this measure.
Posted by William at 10:02 AM No comments:
Monday, April 18, 2016
What is times interest earned?
Times interest earned = operating income/ interest expense. Five or greater is considered a good conservative ratio.
Posted by William at 12:33 PM No comments:
Friday, April 15, 2016
What are unrealized gains?
Unrealized gains represent the increase in the value of your stock on paper. These gains don’t become cash unless you sell your holdings and then it becomes realized gains.
Posted by William at 10:01 AM No comments:
Thursday, April 14, 2016
What is dividend yield?
Dividend Yield = [Annual dividend per share/Stock price per share] x 100
Posted by William at 9:40 AM No comments:
Wednesday, April 13, 2016
What are earnings per share?
Earnings per share (EPS) = Net Income/Shares Outstanding
Posted by William at 10:29 AM No comments:
Tuesday, April 12, 2016
What is a P/E ratio?
P/E Ratio = Stock Price/Earnings per Share
Posted by William at 9:54 AM No comments:
Monday, April 11, 2016
The Coin Jar
Pennies add up to dollars. Throwing change into a jar is better than not saving anything at all. It can actually add up to a somewhat decent amount over time.
Posted by William at 8:56 AM No comments:
Thursday, April 7, 2016
Cash is King in Investing
Remember to always keep enough cash (above and beyond your emergency fund) to take advantage of any opportunity provided by stock market corrections. Stock market corrections mean you can buy quality companies on the cheap.
Posted by William at 8:41 AM No comments:
Wednesday, April 6, 2016
Have you done your research?
Before investing in anything you should do your research. You may be investing in a proverbial lemon that could cost you your investment.
Posted by William at 9:38 AM No comments:
Tuesday, April 5, 2016
Stock Price Corrections are Good
Lower stock prices means long-term investors can pick up shares of good companies on the cheap.
Posted by William at 10:15 AM No comments:
Monday, April 4, 2016
Have you thought about earmarking your money?
Not all dollars are the same. Some money gets allocated to various outlays such as utilities, recreation and investing.
Posted by William at 9:02 AM No comments:
Friday, April 1, 2016
Have you thought about your stock’s valuation?
The chances of getting a good return on your investment depend not only on the business viability of the company behind your stock but paying a good price. One simple way to determine whether or not your stock is cheap is looking at the company’s P/E ratio. Buying shares in a company backed by solid fundamentals with a low P/E ratio could improve your total return over the long-term.
Posted by William at 11:12 AM No comments:
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