Read Stock Quotes
If you’ve developed an interest in the stock market, you no doubt have a company or two in mind that you’d like to investigate. Every publicly traded company can be looked up and analyzed through their stock quotes. These quotes are snapshots of the company’s stock, and how well it is performing on the market. Follow this guide to make sense of the jargon and educate your investment decisions.
Contents
Steps
Finding Your Stock
- Use a financial web service. There are free and paid websites that will allow you to look at stock quotes. Google, MSN, Yahoo!, and many more offer free stock tracking services.
- Web services will often provide much more detailed information and graphs that aren’t provided by newspaper listings.
- Look it up in a newspaper. In order to find your stock in a newspaper, you will need to know the stock symbol. This is a collection of letters that serve as shorthand for the company name. It may be similar to the name, but oftentimes the letters don’t correlate.
- Some publications may list the company name along with the symbol.
- You can find the symbol for any publicly traded company by searching for it on a variety of financial websites.
- Company websites often list their stock symbol on the website.
- Check the ticker. Most financial TV programs and channels will have a stock ticker running along the bottom. These provide a brief glimpse at the stock, and usually do not have as much information as either a newspaper or a website.
Decoding a Stock Quote
- Learn all of the terminology. Most every listing will provide you with the same basic information. Listings typically show the following information:
- Close/Current Price – The price at the end of the trading day.
- 52W high/low – This is the range of lowest and highest price of the stock in the last year.
- Div – Dividend paid per share. May be blank.
- % Yield – The percentage of the dividend return compared to stock price.
- EPS – Earnings per share.
- P/E – Price/Earnings ratio. This is the earnings compared to the price of the stock.
- Vol – This is Volume, the number of shares traded on the previous day.
- High/Low – The highest and lowest trading price the previous day.
- Net chg – This is the change from the previous day’s closing price.
- Shares – Number of shares held by investors.
- Mkt cap – Total value of the company on the market.
- Make note of the current price. The current price is the price of one share at the close of trading the previous day. This price should only be taken as a guideline, because the price will continue to fluctuate even after the market has closed.
- The price may not have a currency symbol next to it.
- Check the 52-week high and low price. 52-week high and low gives you a historical view of how much the stock has fluctuated. This information can be helpful in determining the general direction of a stock's price.
- Find the dividend, if any. Some stocks pay investors a dividend. A dividend is equity paid directly to the investor. Not every stock pays out a dividend. If the company does not pay a dividend, this section may be blank or occupied by a dash.
- Dividends can be paid monthly, quarterly, semi-annually or annually.
- In some cases, dividends are reinvested; that is, the investor receives additional stock instead of cash when the dividend is paid.
- Calculate the Earnings Per Share (EPS). The EPS is a measure of the current stock price compared to the earnings for the company over the last four fiscal quarters. It is calculated by dividing the net income of the company by the number of outstanding shares.
- EPS is generally considered one of the most important aspects of determining the value of a stock.
- Calculate the Price to Earnings (P/E) ratio. This number is the stock's current price divided by the most recent 12-month earnings amount per share (EPS). The P/E ratio is designed to show you if a stock price is overvalued or undervalued.
- A high P/E ratio means that investors expect that higher earnings in the future. A low P/E means that they expect less.
- Compare P/E ratios to other companies in the same sector to see how well it is performing.
- Check the stock's volume. The volume is the amount of shares that have been traded in the current session (usually the last day). You may also see an average volume, which is the number of shares traded during a specific period. The length of the average varies based on which stock price report service you use.
- Find the High/Low column or Range. This will show you the stock's lowest and highest price of the day. This can help give you a sense of the volatility of a stock.
- See how the stock fared yesterday. The Net Change column will tell you how the stock has performed compared to the day before. If a stock is “up,” it’s because it traded at a higher value than the day before. Some stock price report services call this measure the open price instead of the closing price.
- Determine the total shares for the stock. This number is sometimes reported as shares and reflects the all shares, purchased and available for purchase, for the stock.
- Look at the market capitalization. This amount, which is generally called the market cap, is the total value of the company on the stock market. To arrive at this number, you multiple the total available shares of stock by the current stock price.
